Waste Services Announces Strong Fourth Quarter and 2008 Fiscal Year Results



    - Adjusted EBITDA of $24.3 million for the quarter and $107.1 million for
the year.
    

    
    - Adjusted EBITDA margin of 23.7% for the quarter and 22.6% for the year
as compared to 22.1% and 22.3% in 2007.
    

    
    - Adjusted earnings per share(1) from continuing operations of $0.07 for
the quarter ended December 31, 2008 and $0.34 for the full year as compared to
$0.04 and $0.06 in 2007.
    

    
    - Total debt reduced by $72.4 million during the year to $372.1 million
at December 31, 2008.
    

    
    BURLINGTON, Ontario, Feb. 23 /PRNewswire-FirstCall/ -- Waste Services,
Inc. (Nasdaq:   WSII) today announced financial results for the fourth quarter
and for the year ended December 31, 2008.  On an adjusted basis, fully diluted
earnings per share were $0.07 for the quarter as compared to $0.04 in the
fourth quarter of 2007.  Revenue for the quarter was $102.4 million compared
to $123.3 million for the same quarter in 2007.  The financial results for the
quarter have been impacted by several non-operational items. As a result,
reported net loss for the quarter was $14.8 million as compared to a loss in
the comparative period of $0.8 million.  The results for the quarter are
highlighted by:
    

    --  For the current quarter adjusted income from operations, excluding one
        time charges, was $13.5 million and Adjusted EBITDA was $24.3 million
        with margins of 13.2% and 23.7%, respectively.
    --  Excluding recycled commodity sales, internal revenue growth from price
        was 3.7%.  With commodity sales, internal revenue growth was 2.3% from
        price and 0.4% from fuel surcharge.
    --  Internal revenue growth from volume declined by 5.4%.
    --  Foreign currency translation accounted for $12.8 million (10.3%) of
the
        revenue reduction and the net expiration of municipal contracts
        accounted for a $4.2 million (3.4%)


    
    For the full year 2008, the Company reported revenue of $473.0 million as
compared to $461.4 million for 2007.  Adjusted earnings per share for the year
were $0.34 as compared to $0.06 for 2007. The results for the year ended
December 31, 2008 are highlighted by:
    

    --  For the year adjusted income from operations, excluding one time
        charges, was $59.0 million and Adjusted EBITDA was $107.1 million with
        margins of 12.5 % and 22.6 %, respectively.
    --  Revenue growth of 2.5% to $473.0 million compared to $461.4 million in
        2007.
    --  Internal revenue growth was 1.9%, made up of 3.9% from price, 2.3%
from
        fuel and environmental surcharge and (4.3%) volume.
    --  Acquisitions net of divestitures added $18.6 million of revenue or
        4.0%, while the net expiration of municipal contracts accounted for a
        $16.1 million reduction or 3.5%.


    

    
    (1) Adjusted EPS is defined as earnings per share as adjusted to
        reflect the average statutory income tax rate estimated at 36%.

    
    David Sutherland-Yoest, Waste Services President and Chief Executive
Officer, stated, "We are pleased to report our results for the fourth quarter
and the 2008 fiscal year.  We achieved our previously provided guidance for
adjusted EBITDA and earnings per share for 2008 and we have taken several
steps that we feel will protect the company from further economic headwinds of
today's business environment.  On October 8th, we completed the refinancing of
our bank facilities, pushing maturities out five years and greatly reducing
the credit risk profile of the company.  In December, we announced the
successful completion of our restructuring, eliminating $6.6 million in annual
overhead costs. When the commodity markets dropped precipitously in November
and December, we implemented a commodity surcharge to our recycling customers
to partially offset the price declines going forward.
    

    
    Looking forward, capital expenditures will be below $40 million in 2009
and we expect to generate free cash flow of between $25 and $35 million.  We
expect internal revenue growth from price in our core collection and landfill
businesses to be in the 3-5% range.  Or continued confidence in pricing,
margin expansion and free cash flow generation stems from our disposal
capacity and vertical integration in Florida and in Canada."
    


    Reconciliation of Non-GAAP Measures:

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

    

    
                                      For The Three Months    For The Year
                                       Ended December 31,  Ended December 31,
                                        2008     2007       2008       2007
    Loss from continuing operations   $(14,785)   $(843)   $(1,956)  $(14,303)
    Income tax provision (benefit)        (744)   3,819      6,183     14,437
    Interest expense                    11,661    9,860     37,432     40,679
    Depreciation, depletion and
     amortization                       10,522   14,045     45,348     54,891
    EBITDA from continuing
     operations (1)                     $6,654  $26,881    $87,007    $95,704


    
    The following table reconciles the differences between EBITDA from
continuing operations and Adjusted EBITDA from continuing operations for the
three months and year ended December 31, 2008 and 2007 (in thousands)
(unaudited).  The credit agreement governing our senior secured credit
facilities provides for an adjustment to EBITDA from continuing operations for
restructuring charges of up to $5.0 million, however, we have incurred $7.1
million of charges relative to our restructuring and cost reduction
initiatives in 2008.
    

    

    
                                      For The Three Months    For The Year
                                       Ended December 31,  Ended December 31,
                                        2008     2007       2008       2007
    EBITDA from continuing
     operations (1)                     $6,654  $26,881    $87,007    $95,704
    Adjustments to EBITDA from
     continuing operations (as
     defined per credit agreement):
        Non-cash items (2)              10,532      418     13,005      3,143
        Other excludable expenses (3)    7,092     (130)     7,092      4,347
    Adjusted EBITDA from continuing
     operations (1)                    $24,278  $27,169   $107,104   $103,194
    

    
    (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 expensed deferred acquisition
        costs, 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 restructuring
        related costs.

    
    The following table reconciles the differences between income (loss) from
continuing operations before income taxes, as determined under US GAAP, and
adjusted income from continuing operations for the three months and year ended
December 31, 2008 and 2007. This information is then used as the numerator to
calculate normalized earnings per share. Adjusted income from continuing
operations and normalized earnings per share are non-US GAAP measures used by
management to measure performance. We believe that adjusted income from
continuing operations and normalized earnings per share may be used by certain
investors to analyze and compare our operating performance between periods and
against the operating results of other companies whose corporate structure and
tax rates differ from ours. Adjusted income from continuing operations and
normalized earnings per share are not calculated under US GAAP and therefore
are not necessarily comparable to similarly titled measures of other companies
(in thousands) (unaudited):
    

    



    
                                      For The Three Months    For The Year
                                       Ended December 31,  Ended December 31,
                                        2008     2007       2008       2007
    Income (loss) from continuing
     operations before income taxes   $(15,529)  $2,976     $4,227       $134
    Add back:
        Refinance charges                2,869        -      2,869          -
        Restructuring, severance and
         related costs                   7,092        -      7,092      3,995
    Deferred acquisition costs          10,267        -     10,267          -
    Adjusted income from continuing
     operations before income taxes      4,699    2,976     24,455      4,129
    Income tax provision (benefit)
     at estimated average statutory
     rate of 36%                         1,692    1,071      8,804      1,486
    Adjusted income from continuing
     operations                         $3,007   $1,905    $15,651     $2,643
    Basic and diluted normalized
     earnings per share:
        Basic and diluted normalized
         earnings per share -
         continuing operations           $0.07    $0.04      $0.34      $0.06
            Weighted average common
             shares outstanding
                Basic                   46,082   46,075     46,079     46,007
                Diluted                 46,147   46,163     46,109     46,529



    
    We will host an investor and analyst conference call on Monday, February
23, 2009 at 2:00 p.m. (ET) to discuss the results of today's earnings
announcement.  If you wish to participate in this call, please phone
866-543-6408 (US and Canada) or 617-213-8899 (International) and enter
passcode number 18159420.  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 March 4, 2009 by phoning 888-286-8010 (US
and Canada) or 617-801-6888 (International) and entering passcode number
31851212.  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.
    


    



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

    
                                      For The Three Months    For The Year
                                       Ended December 31,  Ended December 31,
                                        2008     2007       2008       2007
    Revenue                           $102,393 $123,252   $473,029   $461,447
    Operating and other expenses:
      Cost of operations (exclusive
       of depreciation, depletion
       and amortization)                66,459   79,577    309,121    301,573
      Selling, general and
       administrative expense
       (exclusive of depreciation,
       depletion and amortization)      18,531   16,924     66,474     64,239
      Deferred acquisition costs        10,267        -     10,267          -
      Depreciation, depletion and
       amortization                     10,522   14,045     45,348     54,891
      Foreign exchange loss (gain)
       and other                           482     (130)       160        (69)
    

    
    Income (loss) from operations       (3,868)  12,836     41,659     40,813
    Interest expense                    11,661    9,860     37,432     40,679
    

    
    Income (loss) from continuing
     operations before income taxes    (15,529)   2,976      4,227        134
    Income tax provision (benefit)        (744)   3,819      6,183     14,437
    

    
    Loss from continuing operations    (14,785)    (843)    (1,956)   (14,303)
    Income from discontinued
     operations, net of income tax
     provision of $266 for the year
     ended December 31, 2008 and nil
     for all other periods                   -      986        409      2,796
    Gain (loss) on sale of discontinued
     operations, net of income tax
     provision of $2,770 and $7,255 for
     the three and twelve months ended
     December 31, 2008 and nil for all
     other periods                       4,241     (155)    11,110    (11,607)
    

    
    Net income (loss)                 $(10,544)    $(12)    $9,563   $(23,114)
    

    
    Basic and diluted earnings (loss)
     per share:
      Earnings (loss) per share -
       continuing operations            $(0.32)  $(0.02)    $(0.04)    $(0.31)
      Earnings (loss) per share -
       discontinued operations            0.09     0.02       0.25      (0.19)
    Basic and diluted earnings (loss)
     per share                          $(0.23)     $ -      $0.21     $(0.50)
    

    
        Weighted average common
         shares outstanding
            Basic                       46,082   46,075     46,079     46,007
            Diluted                     46,082   46,075     46,079     46,007
    



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

    
    Balance Sheet Data:
                                                     December 31, December 31,
                                                         2008         2007
    Cash                                                 $7,227      $20,706
    Current assets                                      $72,961      $99,406
    Total assets                                       $840,927     $938,488
    Current liabilities                                 $93,245      $95,375
    Debt:
      Senior secured credit facilities:
          US Revolver                                   $34,600          $ -
          Canadian Revolver                              27,699            -
          US Term loan                                   38,125            -
          Canadian Term Loan                           103,505            -
       Prior Credit facilities
          Revolver                                            -            -
          Term loan                                           -      273,910
      Senior subordinated notes                         158,854      160,000
      Other notes                                         9,286       10,530
          Total debt                                   $372,069     $444,440
    Shareholders' equity                               $335,018     $350,595
    


    
    Cash Flow Data:
                                                      Year Ended December 31,
                                                         2008         2007
    

    
      Net cash flows provided by continuing operations  $56,051      $54,677
      Net cash flows provided by (used in) investing
       activities for continuing operations             $(3,123)    $(79,557)
      Net cash flows provided by (used in) financing
       activities of continuing operations             $(67,471)     $33,608
      Capital expenditures from continuing operations   $48,066      $57,557
    




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


    
                               Waste Services, Inc.
                                 Revenue Growth
                  For The Three Months Ended December 31, 2008
                                 (in thousands)
    



    
    Total Revenue, December 31, 2007               $123,252
      Impact on revenue from changes in:
        Price                                         3,274        2.7%
        Volume                                       (6,640)      -5.4%
        Acquisition / Disposition                        (6)       0.0%
        Gain / Loss of Contracts                     (4,165)      -3.4%
        Other                                          (570)      -0.5%
        Foreign currency impact                     (12,752)     -10.3%
    

    
    Total Revenue, December 31, 2008               $102,393
    


    
                               Waste Services, Inc.
                                 Revenue Growth
                      For The Year Ended December 31, 2008
                                 (in thousands)
    


    
    Total Revenue, December 31, 2007               $461,447
      Impact on revenue from changes in:
        Price                                        28,725        6.2%
        Volume                                      (19,742)      -4.3%
        Acquisition / Disposition                    18,556        4.0%
        Gain / Loss of Contracts                    (16,078)      -3.5%
        Other                                        (1,894)      -0.4%
        Foreign currency impact                       2,015        0.4%
    

    
    Total Revenue, December 31, 2008               $473,029
    



    
                                   COUNTRY DATA
                                  (In thousands)
                                   Three Months Ended December 31, 2008
                               US             Canada            Total
    Revenue                 $52,021  100.0%  $50,372  100.0%  $102,393  100.0%
    Operating expenses:
      Cost of operations     31,977   61.4%   34,482   68.4%    66,459   64.9%
      Selling, general and
       administrative expense
       (exclusive of
       restructuring,
       severance and
       related costs)         5,972   11.5%    5,688   11.3%    11,660   11.4%
      Restructuring,
       severance and
       related costs          4,673    9.0%    2,198    4.4%     6,871    6.7%
      Deferred acquisition
       costs                 10,267   19.7%        -    0.0%    10,267   10.0%
      Depreciation, depletion
       and amortization       6,242   12.0%    4,280    8.5%    10,522   10.3%
      Foreign exchange (gain)
       loss and other          (165)  -0.2%      647    1.3%       482    0.5%
    Income (loss) from
     continuing operations  $(6,945) -13.4%   $3,077    6.1%   $(3,868) -3.8%
    


    
                                   Three Months Ended December 31, 2007
                               US             Canada            Total
    Revenue                $ 61,838  100.0%  $61,414  100.0%  $123,252 100.0%
    Operating expenses:
      Cost of operations     39,329   63.6%   40,248   65.6%    79,577  64.6%
      Selling, general and
       administrative
       expense                8,578   13.9%    8,346   13.6%    16,924  13.7%
      Depreciation, depletion
       and amortization       8,493   13.7%    5,552    9.0%    14,045  11.4%
      Foreign exchange gain
       and other                (68)  -0.1%      (62)  -0.1%      (130) -0.1%
    Income from continuing
     operations             $ 5,506    8.9%   $7,330   11.9%   $12,836  10.4%
    



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

    
                                   Year Ended December 31, 2008
                               US             Canada            Total
    Revenue                $231,352  100.0% $241,677  100.0%  $473,029 100.0%
    Operating expenses:
      Cost of operations    148,474   64.2%  160,647   66.5%   309,121  65.3%
      Selling, general and
       administrative
       expense (exclusive
       of restructuring,
       severance and related
       costs)                30,027   13.0%   29,576   12.2%    59,603  12.6%
      Restructuring, severance
       and related costs      4,673    2.0%    2,198    0.9%     6,871   1.5%
      Deferred acquisition
       costs                 10,267    4.4%        -    0.0%    10,267   2.2%
      Depreciation, depletion
       and amortization      26,145   11.3%   19,203    7.9%    45,348   9.6%
      Foreign exchange (gain)
       loss and other          (628)  -0.3%      788    0.4%       160   0.0%
    Income from continuing
     operations             $12,394    5.4%  $29,265   12.1%   $41,659   8.8%
    


    
                                   Year Ended December 31, 2007
                               US             Canada            Total
    Revenue                $239,384  100.0% $222,063  100.0%  $461,447 100.0%
    Operating expenses:
      Cost of operations    154,250   64.4%  147,323   66.3%   301,573  65.3%
      Selling, general and
       administrative expense
       (exclusive of severance
       and related costs)    32,094   13.4%   28,150   12.7%    60,244  13.1%
      Severance and related
       costs                  3,995    1.7%        -    0.0%     3,995   0.9%
      Depreciation, depletion
       and amortization      35,262   14.8%   19,629    8.8%    54,891  11.9%
      Foreign exchange (gain)
       loss and other           282    0.1%     (351)  -0.1%       (69)  0.0%
    Income from continuing
     operations             $13,501     5.6% $27,312   12.3%   $40,813   8.8%


    




For further information:

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

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