Waste Services Announces Record Second Quarter Results and the Appointment of Director



    
    -- Record second quarter EBITDA.

    -- Record second quarter EBITDA margins.

    -- Record pre-tax income and net income from continuing operations.

    -- EPS from continuing operations of $0.09, normalized EPS from continuing
    operations of $0.13(1).

    -- Free cash-flow positive for the second quarter and year-to-date.

    
    BURLINGTON, Ontario, July 22 /CNW/ -- Waste Services, Inc. (Nasdaq:   WSII)
today announced financial results for the three months ended June 30, 2008. 
The quarter was highlighted by strong top line growth and continued margin
expansion:
    -- Revenue growth of 7.4% to $128.3 million compared to $119.4 million in
2007.
    -- Internal revenue growth was 4.4%, made up of 4.1% price, 3.7% fuel and
environmental surcharge, (3.4)% volume.
    -- Acquisitions net of divestitures added $1.0 million of revenue or
0.9%, while the net expiration of municipal contracts accounted for a $3.7
million reduction or 3.1%.
    -- Operating income and Adjusted EBITDA expanded to $16.8 million and
$29.3 million with margins of 13.1% and 22.8%, respectively.
    The six-month results for the period ended June 30, 2008 support our
previous guidance. The year-to-date results are highlighted by:
    -- Revenue growth of 14.2% to $244.9 million compared to $214.4 million
in 2007.
    -- Internal revenue growth was 2.8%, made up of 4.0% price, 2.9% fuel and
environmental surcharge, (4.1)% volume.
    -- Acquisitions net of divestitures added $19.2 million of revenue or
9.0%, while the net expiration of municipal contracts accounted for a $7.5
million reduction or 3.5%.
    -- Operating income and Adjusted EBITDA expanded to $28.9 million and
$53.9 million with margins of 11.8% and 22.0%, respectively.
    (1) Normalized EPS is defined as earnings per share as adjusted to
reflect the average statutory income tax rate estimated at 36%.
    Additionally, Waste Services, Inc. announced that Michael H. DeGroote,
47, has been appointed a director of the company effective July 22, 2008 for a
term expiring in 2009.  Mr. DeGroote is the President of Westbury
International, a full-service real estate development company.  He is the son
of Michael G. DeGroote and the brother of Gary W. DeGroote, a director of the
company.  Collectively, the DeGroote family owns approximately 28.5% of our
outstanding shares.
    David Sutherland-Yoest, Waste Services Chairman and Chief Executive
Officer, stated, "We are pleased with the Company's progress as we continue to
improve our financial results and operational efficiency and continue to grow
the business organically despite the difficult economic environment. We are
excited about the opportunities in the markets in which we operate and look
forward to benefiting from our strategic positioning in the near term as these
markets develop. We are also pleased to have Michael H. DeGroote as part of
our board and look forward to his contributions."

    
    2008 Outlook
    Waste Services re-iterates previously issued guidance for 2008:
    -- Revenue in the range of $480 million to $500 million.
    -- Organic revenue growth of 3% to 4%.
    -- EBITDA in the range of $110 million to $115 million.
    -- Adjusted EBITDA in the range of $115 million to $120 million.
    -- Operating income in the range of $55 million to $65 million.
    -- Pre-tax income in the range of $20 million to $25 million.
    
    -- Normalized EPS(1) from continuing operations in the range of $0.30 to
$0.35 per share.
    -- Capital spending is expected to be in the range of $55 million to $60
million.
    This guidance assumes: (i) no significant deterioration in economic
conditions in Florida or Canada, and (ii) no significant change in exchange
rates. Guidance will be adjusted upon announcement of any unusual or
non-recurring items as the year progresses.
    (1) Normalized EPS is defined as earnings per share as adjusted to
reflect the average statutory income tax rate estimated at 36%.
    
    Reconciliation of Non-GAAP Measures:
    
    The following table reconciles the differences between net income (loss),
as determined under US GAAP, and EBITDA from continuing operations, a non-GAAP
financial measure (in thousands) (unaudited):



    
                               For The Three Months      For The Six Months
                                  Ended June 30,            Ended June 30,
                                2008        2007          2008        2007
    Net income (loss) from
     continuing operations     $4,030    $(3,170)        $9,309      $(7,787)
    Income tax provision        5,003      4,407          1,570        6,144
    Interest expense            7,802     10,830         18,040       20,575
    Depreciation, depletion
     and amortization          11,620     14,341         23,410       25,699
    EBITDA from continuing
     operations (1)           $28,455    $26,408        $52,329      $44,631
    
    The following table reconciles the differences between EBITDA and
Adjusted EBITDA, as defined in our credit agreement, for the three and six
months ended June 30, 2008 and 2007 (in thousands) (unaudited):


    
                                 For The Three Months       For The Six Months
                                    Ended June 30,            Ended June 30,
                                   2008        2007         2008        2007
    EBITDA from continuing
     operations (1)              $28,455     $26,408       $52,329     $44,631
    Adjustments to EBITDA
     from continuing
     operations
     (as defined per credit
      agreement):
        Non-cash items (2)           827         439         1,543         764
        Other excludable
         expenses (3)                 -           -            -         1,225
    Adjusted EBITDA from
     continuing operations (1)   $29,282     $26,847       $53,872     $46,620
    
    (1) EBITDA from continuing operations and EBITDA from continuing
operations as defined in our credit agreement ("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 and asset sales.
    (3) Other excludable expenses adjustments include professional fees for
certain litigation, severance and other non-recurring costs.
    We will host an investor and analyst conference call on Wednesday, July
23, 2008 at 8:30 a.m. (ET) to discuss the results of today's earnings
announcement.  If you wish to participate in this call, please phone
800-706-7745 (US and Canada) or 617-614-3472 (International) and enter
passcode number 64636817.  To hear a web cast of the call over the Internet,
access the home page of our website at www.wasteservicesinc.com.  A post-view
of the call will be available until August 6, 2008 by phoning 888-286-8010 (US
and Canada) or 617-801-6888 (International) and entering passcode number
94291561.  The web cast will also be available on our website.
    
    Safe Harbor for Forward-Looking Statements
    
    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 December 31, 2007.
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.
    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.
    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 United States absent a registration or applicable exemption
from registration requirements under applicable state and federal securities
laws.
    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 United States and Canada.  The
company's website is www.wasteservicesinc.com.  Information on the company's
website does not form part of this press release.

    
     For information contact:
     Edwin D. Johnson
     Executive Vice President and Chief Financial Officer
     Waste Services, Inc.
     561-237-3400
    



    
                             WASTE SERVICES, INC.
          UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                    (In thousands, except per share data)
    

    
                                 Three Months Ended         Six Months Ended
                                      June 30,                   June 30,
                                  2008        2007          2008        2007
    

    
    Revenue                    $128,282     $119,421     $244,890    $214,420
    

    
    Operating and other
     expenses:
      Cost of operations
       (exclusive of
        depreciation,
        depletion and
        amortization)            83,605       78,499      160,149     141,266
      Selling, general and
       administrative expense
       (exclusive of
        depreciation, depletion
        and amortization)        16,505       14,678       32,869      29,110
      Depreciation, depletion
       and amortization          11,620       14,341       23,410      25,699
      Foreign exchange gain and
       other                       (283)        (164)        (457)       (587)
    

    
    Income from operations       16,835       12,067       28,919      18,932
    Interest expense              7,802       10,830       18,040      20,575
    

    
    Income (loss) from
     continuing operations
     before income taxes          9,033        1,237       10,879      (1,643)
    Income tax provision          5,003        4,407        1,570       6,144
    

    
    Net income (loss) from
     continuing operations        4,030       (3,170)       9,309      (7,787)
    Net income from
     discontinued operations,
     net of income tax provision
     of $301 for the six months
     ended June 30, 2008 and nil
     for all other periods           -           957          461         963
    Gain (loss) on sale of
     discontinued operations,
     net of income tax provision
     (benefit) of $(64) and
     $4,485 for the three and
     six months ended June 30,
     2008, respectively and nil
     for all other periods         (100)      (12,192)      6,869     (11,254)
    

    
    Net income (loss)            $3,930      $(14,405)    $16,639    $(18,078)
    

    
    Basic and diluted
     earnings (loss) per share:
       Earnings (loss) per
        share - continuing
        operations                $0.09        $(0.07)      $0.20      $(0.17)
       Earnings (loss) per
        share - discontinued
        operations                  -          (0.25)        0.16       (0.22)
    Basic and diluted earnings
     (loss) per share             $0.09       $(0.32)       $0.36      $(0.39)
    

    
    Weighted average common
     shares outstanding
        Basic                    46,075       45,973       46,075      45,973
        Diluted                  46,075       45,973       46,084      45,973
    




    
                             WASTE SERVICES, INC.
           SUPPLEMENTAL UNAUDITED BALANCE SHEET AND CASH FLOW DATA
                                (In thousands)
    

    
    Balance Sheet Data:                              June 30,    December 31,
                                                       2008          2007
    

    
    Cash                                             $33,548        $20,706
    Current assets                                  $107,948        $99,406
    Total assets                                    $899,556       $938,488
    Current liabilities                              $86,941        $95,375
    Debt:
      Senior secured credit facilities:
        Revolver                                          $-             $-
        Term loan                                    231,410        273,910
      Senior subordinated notes                      160,000        160,000
      Other notes                                      9,919         10,530
          Total debt                                $401,329      $ 444,440
    Shareholders' equity                            $363,197      $ 350,595
    


    
    Cash Flow Data:
    

    
                                                   Six Months Ended June 30,
                                                       2008          2007
    

    
    Cash flows provided by continuing operations     $21,481        $20,376
    Cash flows provided by (used in) investing
     activities for continuing operations            $33,767       $(47,183)
    Cash flows provided by (used in) financing
     activities of continuing operations            $(43,225)       $33,638
    Capital expenditures from continuing
     operations                                      $20,399        $21,858
    




    
                             WASTE SERVICES, INC.
             SUPPLEMENTAL UNAUDITED GROWTH RATES AND COUNTRY DATA
                                (In thousands)
    

    
                             Waste Services, Inc.
                                Revenue Growth
                   For The Three Months Ended June 30, 2008
                                (in thousands)
    

    
    Total Revenue, June 30, 2007              $119,421
      Impact on revenue from changes in:
         Price                                   9,259      7.8%
         Volume                                 (4,023)    -3.4%
         Acquisition / Disposition               1,032      0.9%
         Gain / Loss of Contracts               (3,679)    -3.1%
         Other                                     411      0.3%
         Foreign currency impact                 5,861      4.9%
    

    
    Total Revenue, June 30, 2008              $128,282
    



    
                             Waste Services, Inc.
                                Revenue Growth
                    For The Six Months Ended June 30, 2008
                                (in thousands)
    

    
    Total Revenue, June 30, 2007              $214,420
      Impact on revenue from changes in:
         Price                                  14,718      6.9%
         Volume                                 (8,818)    -4.1%
         Acquisition / Disposition              19,215      9.0%
         Gain / Loss of Contracts               (7,500)    -3.5%
         Other                                  (1,101)    -0.5%
         Foreign currency impact                13,956      6.5%
    

    
    Total Revenue, June 30, 2008              $244,890
    




    
                                 COUNTRY DATA
                                (In thousands)
    

    
                                  Three Months Ended June 30, 2008
                            US            Canada            Total
    

    
    Revenue              $60,774  100.0%  $67,508  100.0%  $128,282  100.0%
    Operating expenses:
     Cost of
      operations          39,468   64.9%   44,137   65.4%    83,605   65.2%
     Selling, general
      and administrative
      expense              8,309   13.7%    8,196   12.1%    16,505   12.9%
     Depreciation,
      depletion and
      amortization         6,635   10.9%    4,985    7.4%    11,620    9.1%
     Foreign exchange
      gain and other        (282)  -0.4%       (1)   0.0%      (283)  -0.3%
    Income from
     continuing
     operations           $6,644   10.9%  $10,191   15.1%   $16,835   13.1%
    





    
                                  Three Months Ended June 30, 2007
                            US            Canada            Total
    

    
    Revenue              $63,563  100.0%  $55,858  100.0%  $119,421  100.0%
    Operating expenses:
     Cost of operations   41,901   65.9%   36,598   65.5%    78,499   65.7%
     Selling, general
      and administrative
      expense              8,049   12.7%    6,629   11.9%    14,678   12.3%
     Depreciation,
      depletion and
      amortization         9,373   14.7%    4,968    8.9%    14,341   12.0%
     Foreign exchange
      gain and other        (120)  -0.2%      (44)  -0.1%      (164)  -0.1%
    Income from
     continuing
     operations           $4,360    6.9%  $ 7,707   13.8%   $12,067   10.1%
    



    
                             WASTE SERVICES, INC.
                     UNAUDITED COUNTRY DATA - (Continued)
                                (In thousands)
    

    
                                     Six Months Ended June 30, 2008
                             US             Canada            Total
    

    
    Revenue              $120,862  100.0%  $124,028  100.0%  $244,890  100.0%
    Operating expenses:
     Cost of operations    78,384   64.9%    81,765   65.9%   160,149   65.4%
     Selling, general
      and administrative
      expense              16,408   13.6%    16,461   13.3%    32,869   13.4%
    Depreciation,
     depletion and
     amortization          13,482   11.2%     9,928    8.0%    23,410    9.6%
     Foreign exchange
      (gain) loss
      and other              (482)  -0.5%        25    0.0%      (457)  -0.2%
    Income from
     continuing
     operations           $13,070   10.8%   $15,849   12.8%   $28,919   11.8%
    



    
                                     Six Months Ended June 30, 2007
                            US             Canada            Total
    

    
    Revenue             $113,760  100.0%  $100,660  100.0%  $214,420  100.0%
    Operating expenses:
     Cost of operations   73,837   64.9%    67,429   67.0%   141,266   65.9%
     Selling, general
      and administrative
      expense             16,179   14.2%    12,931   12.8%    29,110   13.6%
     Depreciation,
      depletion and
      amortization        16,763   14.7%     8,936    8.9%    25,699   12.0%
     Foreign exchange
      gain and other        (332)  -0.2%      (255)  -0.2%      (587)  -0.3%
    Income from
     continuing
     operations           $7,313    6.4%   $11,619   11.5%   $18,932    8.8%

    




For further information:

For further information: Edwin D. Johnson, Executive Vice President and
Chief Financial Officer of Waste Services, Inc., +1-561-237-3400 Web Site:
http://www.wasteservicesinc.com

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