Waste Services Announces Record First Quarter Results
- Record adjusted EBITDA of $32.2 million for the quarter.
- Record adjusted EBITDA margin of 27.0% for the quarter as compared to
21.4% in 2009.
- Continued strong revenue growth from price of 5.0%
- Record free cash flow(1) for the quarter of $14.8 million.
- Record adjusted EPS of $0.14 for the quarter.
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<p><span class="xn-location">BURLINGTON</span>, Ontario, <span class="xn-chron">April 27</span> /CNW/ -- Waste Services, Inc. (Nasdaq: WSII) today announced financial results for the first quarter ended <span class="xn-chron">March 31, 2010</span>. Fully diluted earnings per share before merger charges and other unusual items were <span class="xn-money">$0.14</span> for the quarter as compared to <span class="xn-money">$0.03</span> in the first quarter of 2009. The reported results include expenses relating to the pending merger with IESI-BFC Ltd. (NYSE, TSX: BIN) and a gain in the valuation of warrants. Including these items, fully diluted earnings per share were <span class="xn-money">$0.12</span>.</p>
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<p>Revenue for the quarter was up 24.6% to <span class="xn-money">$119.4 million</span> compared to <span class="xn-money">$95.8 million</span> for the same quarter in 2009. The results for the quarter are highlighted by:</p>
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-- Internal revenue growth generated from price increases was 5.0%.
-- Internal revenue growth relating to volume was 2.4%.
-- Positive organic growth in both Florida and Canada.
-- Foreign currency translation accounted for $10.0 million in reported
revenue increase.
-- Acquisitions added $6.1 million in revenue.
-- Adjusted EBITDA was $32.2 million as compared to $20.5 million in the
first quarter of the prior year and the company's previous best
quarter
result of $30.5 million (fourth quarter, 2009).
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<p>David Sutherland-Yoest, Waste Services President and Chief Executive Officer, stated, "We are pleased to again be reporting record financial results for a quarter as the company continues to sustain solid organic growth with expanding margins and rising profitability. By every measure of valuation in our industry, our first quarter results are the best in our Company's history. As our business continues to improve on a stand-alone basis, the pending merger with IESI-BFC Ltd. has been well received by the market and brought substantial benefits to our shareholders, both in share price and trading liquidity. We look forward to the completion of the deal, working to realize the anticipated synergies between the two companies and an outstanding 2010 for the combined shareholder group."</p>
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2010 Outlook
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<p>Waste Services reiterated stand-alone guidance for 2010, excluding any effects of the contemplated merger with IESI-BFC Ltd.:</p>
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-- Revenue in the range of $480 million to $500 million.
-- Organic revenue growth of 4% to 5%, primarily from price.
-- Adjusted EBITDA in the range of $120 million to $125 million.
-- Adjusted EBITDA margins of 25 to 27 percent.
-- EPS in the range of $0.50 to $0.55 per share.
-- Capital spending in the range of $30 million to $35 million.
-- Free cash flow(1) of $50 to $55 million.
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<p>This guidance assumes: (i) no significant deterioration in economic conditions in Florida or <span class="xn-location">Canada</span>, 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.</p>
<p/>
<p>(1) Free Cash Flow is defined as net cash flows provided by operations less capital expenditures.</p>
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Reconciliation of Non-GAAP Measures:
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<p>The following table reconciles the differences between income from operations, as determined under US GAAP, and EBITDA, a non-GAAP financial measure (in thousands) (unaudited):</p>
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<p> </p>
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For The Three Months
Ended March 31,
---------------
2010 2009
---- ----
Income from operations $5,583 $4,010
Income tax provision 3,451 2,588
Change in fair value of
warrants (177) (1,771)
Interest expense 8,422 7,498
Landfill depletion
expense 2,505 2,076
Depreciation and
amortization 9,644 8,284
----- -----
EBITDA from operations
(1) $29,428 $22,685
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<p>The following table reconciles the differences between EBITDA and Adjusted EBITDA for the three months ended <span class="xn-chron">March 31, 2010</span> and 2009 (in thousands) (unaudited).</p>
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For The Three Months
Ended March 31,
---------------
2010 2009
---- ----
EBITDA from operations (1) $29,428 $22,685
Adjustments to EBITDA from
operations
(as defined per credit
agreement):
Loss (gain) on sale of
assets 12 (3,520)
Non-cash items (2) 1,464 1,378
Other excludable expenses
(3) 1,293 -
----- ---
Adjusted EBITDA from
operations (1) $32,197 $20,543
======= =======
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<p> </p>
<p> </p>
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(1) EBITDA and Adjusted EBITDA ("Adjusted EBITDA") are non-GAAP
measures used by management to measure performance. We also believe
that EBITDA and Adjusted EBITDA 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, among other things, as an internal performance measure.
Our lenders also use Adjusted EBITDA to measure our ability to
service and/or incur additional indebtedness under our credit
facilities. However, EBITDA and Adjusted EBITDA 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 and Adjusted EBITDA 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 expense adjustments include non-recurring costs
resulting primarily from the pending merger with IESI-BFC Ltd.
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<p>We will host an investor and analyst conference call on <span class="xn-chron">Wednesday, April 28, 2010</span> at <span class="xn-chron">10:00 a.m. (ET</span>) to discuss the results of today's earnings announcement. If you wish to participate in this call, please phone 866-713-8562 (US and <span class="xn-location">Canada</span>) or 617-597-5310 (International) and enter passcode number 70951670. 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 <span class="xn-chron">May 11, 2010</span> by phoning 888-286-8010 (US and <span class="xn-location">Canada</span>) or 617-801-6888 (International) and entering passcode number 46866469. The web cast will also be available on our website.</p>
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Safe Harbor for Forward-Looking Statements
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<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 <span class="xn-chron">December 31, 2009</span>. 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>
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<p>Additional Information About the Proposed Merger Transaction and Where to Find It</p>
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<p>In connection with the proposed merger transaction, IESI-BFC Ltd. filed an amended Registration Statement on Form F-4/A with the SEC on <span class="xn-chron">April 19, 2010</span>, that included a proxy statement of Waste Services, Inc. and that also included a prospectus of IESI-BFC Ltd. We will mail the proxy statement/prospectus to our stockholders. Waste Services, Inc. and IESI-BFC Ltd. urge investors and security holders to read the proxy statement/prospectus, including any amendments thereto and any other information filed with the SEC, regarding the proposed transaction when such filings become available because they will contain important information. You may obtain copies of all documents filed with the SEC regarding this transaction, free of charge, at the SEC's website (<a href="http://www.sec.gov">www.sec.gov</a>). Copies of the proxy statement/prospectus can also be obtained, when available, without charge, from IESI-BFC Ltd.'s website (<a href="http://www.iesi-bfc.com">www.iesi-bfc.com</a>) or from Waste Services, Inc.'s website (<a href="http://www.wasteservicesinc.com">www.wasteservicesinc.com</a>) or by directing a request to IESI-BFC Ltd., 135 Queens Plate Drive, Suite 300, <span class="xn-location">Toronto</span>, Ontario, <span class="xn-location">Canada</span> M9W 6V1, Attention: Investor Relations, (416) 401-7729, or to Waste Services, Inc., Shareholder Relations, 1122 International Blvd., Suite 601, <span class="xn-location">Burlington</span>, Ontario, <span class="xn-location">Canada</span> L7L 6Z8, (905) 319-1237.</p>
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Proxy Solicitation
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<p>IESI-BFC Ltd., Waste Services, Inc., their respective directors and executive officers and other persons may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information regarding IESI-BFC Ltd.'s directors and executive officers is available in its Registration Statement on Form F-10, which was filed with the SEC on <span class="xn-chron">May 14, 2009</span>. Information regarding Waste Services, Inc.'s directors and executive officers is available in its Annual Report on Form 10-K for the year ended <span class="xn-chron">December 31, 2009</span>, which was filed with the SEC on <span class="xn-chron">March 2, 2010</span>. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the proxy statement/prospectus and other relevant materials to be filed with the SEC when they become available. You may obtain free copies of these documents from Waste Services, Inc. and IESI-BFC Ltd. using the contact information above.</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 <span class="xn-location">United States</span> absent a registration or applicable exemption from registration requirements under applicable state and federal securities laws.</p>
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<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 <span class="xn-location">United States</span> and <span class="xn-location">Canada</span>. 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>
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<p> </p>
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WASTE SERVICES, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
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<p> </p>
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Three Months Ended
March 31,
---------
2010 2009
---- ----
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<p>Revenue <span class="xn-money">$119,393</span> <span class="xn-money">$95,792</span></p>
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Operating and other expenses:
Cost of operations (exclusive of depreciation,
depletion and amortization) 72,740 63,208
Selling, general and administrative expense
(exclusive of
depreciation, depletion and amortization) 17,258 13,209
Depreciation, depletion and amortization 12,149 10,360
Gain on sale of property and equipment, foreign
exchange and other (33) (3,310)
--- ------
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<p>Income from operations 17,279 12,325</p>
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Interest expense 8,422 7,498
Change in fair value of warrants (177) (1,771)
---- ------
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Income from operations before income taxes 9,034 6,598
Income tax provision 3,451 2,588
----- -----
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Net income $5,583 $4,010
====== ======
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<p> </p>
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Earnings per share:
Basic $0.12 $0.09
Diluted 0.12 0.09
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<p> </p>
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Weighted average common shares outstanding:
Basic 46,346 46,110
Diluted 46,991 46,136
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<p> </p>
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WASTE SERVICES, INC.
SUPPLEMENTAL UNAUDITED BALANCE SHEET AND CASH FLOW DATA
(In thousands)
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<p> </p>
<p> </p>
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Balance Sheet Data: March 31, December 31,
2010 2009
---- ----
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<p> </p>
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Cash $5,793 $3,699
Current assets $79,362 $84,323
Total assets $918,317 $914,992
Current liabilities $108,534 $114,905
Debt:
Senior secured credit
facilities:
US Revolver $25,000 $30,000
Canadian Revolver 8,860 5,709
US Term loan 35,084 35,994
Canadian Term Loan 114,166 113,228
Senior subordinated notes 208,627 208,574
Other notes 7,597 7,947
----- -----
Total debt $399,334 $401,452
-------- --------
Shareholders' equity $370,363 $359,348
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Cash Flow Data:
Year Ended March 31,
--------------------
2010 2009
---- ----
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<p> </p>
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Net cash provided by operating
activities $21,214 $16,905
Net cash used in investing
activities $(13,173) $(1,007)
Net cash used in financing
activities $(6,070) $(11,818)
Capital expenditures $6,445 $6,944
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<p> </p>
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WASTE SERVICES, INC.
SUPPLEMENTAL UNAUDITED GROWTH RATES AND COUNTRY DATA
(In thousands)
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<p> </p>
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Waste Services, Inc.
Revenue Growth
For The Three Months Ended March 31, 2010
(in thousands)
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<p> </p>
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Total Revenue, March 31, 2009 $95,792
Impact on revenue from changes in:
Price 4,836 5.0%
Fuel Surcharge 844 0.9%
Volume 2,344 2.4%
Acquisition / Disposition 6,069 6.3%
Gain / Loss of Contracts (376) -0.4%
Other (113) -0.1%
Foreign currency impact 9,997 10.5%
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Total Revenue, March 31, 2010 $119,393
========
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COUNTRY DATA
(In thousands)
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<p> </p>
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Three Months Ended March 31, 2010
---------------------------------
US Canada Total
--- ------ -----
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<p> </p>
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Revenue $58,567 100.0% $60,826 100.0% $119,393 100.0%
Operating
expenses:
Cost
of
operations 34,952 59.7% 37,788 62.1% 72,740 60.9%
Selling,
general
and
administrative
expense 9,083 15.5% 8,175 13.4% 17,258 14.5%
Depreciation,
depletion
and
amortization 6,510 11.1% 5,639 9.3% 12,149 10.2%
Foreign
exchange
(gain)
loss
and
other 25 0.0% (58) -0.1% (33) -0.1%
--- --- ---
Income
from
operations $7,997 13.7% $9,282 15.3% $17,279 14.5%
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Three Months Ended March 31, 2009
---------------------------------
US Canada Total
--- ------ -----
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<p> </p>
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Revenue $50,243 100.0% $45,549 100.0% $95,792 100.0%
Operating
expenses:
Cost
of
operations 31,975 63.6% 31,233 68.6% 63,208 66.0%
Selling,
general
and
administrative
expense 6,446 12.8% 6,763 14.8% 13,209 13.8%
Depreciation,
depletion
and
amortization 6,364 12.7% 3,996 8.8% 10,360 10.8%
Foreign
exchange
(gain)
loss
and
other (3,474) -6.9% 164 0.4% (3,310) -3.5%
------ --- ------
Income
from
operations $8,932 17.8% $3,393 7.4% $12,325 12.9%
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For further information: Edwin D. Johnson, Executive Vice President and Chief Financial Officer of Waste Services, Inc., +1-905-319-1237 Web Site: http://www.wasteservicesinc.com
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