EX-99.1 2 g18710exv99w1.htm EX-99.1 EX-99.1
Exhibit 99.1
(WSI Logo)
 

PRESS RELEASE
 
WASTE SERVICES ANNOUNCES FIRST QUARTER 2009 RESULTS AND PROVIDES EARNINGS PER SHARE GUIDANCE
  •   Strong core price growth of 3.8%.
 
  •   Adjusted EBITDA of $20.5 million for the quarter.
 
  •   Adjusted EBITDA margin of 21.4% for the quarter as compared to 21.1% in 2008.
 
  •   Adjusted earnings per share(1) from continuing operations increased to $0.031 for the quarter ended March 31, 2009 as compared to $0.027 in 2008.
 
  •   Total debt reduced by $15.8 million during the quarter.
 
  •   Provides adjusted earnings per share(1) guidance of $0.38 to $0.40 for 2009, based on current interest and exchange rate levels.
BURLINGTON, Ontario, April 21, 2009, PRNewswire-FirstCall — Waste Services, Inc. (Nasdaq: WSII) today announced financial results for the first quarter ended March 31, 2009. On an adjusted basis, fully diluted earnings per share were $0.031 for the quarter as compared to $0.027 in the first quarter of 2008. Revenue for the quarter was $95.8 million compared to $116.6 million for the same quarter in 2008. Reported net income from continuing operations for the quarter was $4.0 million as compared to income in the comparative period of $5.3 million. The results for the quarter are highlighted by:
  •   Internal revenue growth from price was $3.2 million or 2.8%, and the decline in Fuel Surcharge was $3.6 million or 3.0%.
 
  •   Excluding recycled commodity sales, net of commodity surcharges, core internal revenue growth from price was 3.8%.
 
  •   Internal revenue relating to volume declined by $5.4 million or 4.7%.
 
  •   Foreign currency translation accounted for $10.9 million or 9.3% of the revenue reduction and the net expiration of municipal contracts accounted for a decline of $4.8 million or 4.1%.
  (1)   Adjusted EPS is defined as earnings per share as adjusted for gains on the sale of non-operating assets and certain non-cash adjustments, primarily cumulative adjustments to stock-based compensation, using the average statutory income tax rate estimated at 36% (see table on page 3).
David Sutherland-Yoest, Waste Services President and Chief Executive Officer, stated, “We are pleased to report a strong start to the new year in our seasonally low first quarter and that we have had continued success as an aggressive price leader in our markets. The key to price leverage is providing strong customer service and I commend our district management for staying close to our customers and minimizing service issues. Volumes are down for the industry as a whole and we have experienced reduced special waste volumes at the landfills, but the cost savings initiatives put in place over the past three quarters helped us offset these declines to produce bottom line results slightly ahead of last year. Cash flow was strong in the quarter and we continue to pay down debt. As a result, we are in the best financial position in our history and look forward to taking advantage of our unique collection of assets.”

 

 

Reconciliation of Non-GAAP Measures:
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):
                 
    For The Three Months  
    Ended March 31,  
    2009     2008  
Income from continuing operations
   $ 4,010     $ 5,330  
Income tax provision (benefit)
     2,588       (3,397 )
Change in fair value of warrants
     (1,771 )     —  
Interest expense
     7,498       10,238  
Depreciation, depletion and amortization
     10,360       11,702  
 
            
EBITDA from continuing operations (1)
   $ 22,685     $ 23,873  
 
            
The following table reconciles the differences between EBITDA from continuing operations and Adjusted EBITDA from continuing operations for the three months ended March 31, 2009 and 2008 (in thousands) (unaudited):
                 
    For The Three Months  
    Ended March 31,  
    2009     2008  
EBITDA from continuing operations (1)
   $ 22,685     $ 23,873  
Adjustments to EBITDA from continuing operations (as defined per credit agreement):
                
Gain on sale of assets
     (3,520 )     (245 )
Non-cash items (2)
     1,378       963  
 
            
Adjusted EBITDA from continuing operations (1)
   $ 20,543     $ 24,591  
 
            
 
    (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.

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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 ended March 31, 2009 and 2008. 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):
                 
    Three Months Ended  
    March 31,  
    2009     2008  
Income from continuing operations before income taxes
   $ 6,598     $ 1,933  
 
                
Adjustments:
                
Gain from sale of non-operating assets
     (3,262 )     —  
Change in fair value of warrants
     (1,771 )     —  
Other non-cash charges
     668       —  
 
            
Adjusted income from continuing operations before income taxes
     2,233       1,933  
 
                
Income tax provision (benefit) at estimated average statutory rate of 36%
     804       696  
 
                
 
            
Adjusted income from continuing operations
   $ 1,429     $ 1,237  
 
            
 
                
Basic and diluted normalized earnings per share:
                
Basic and diluted normalized earnings per share — continuing operations
   $ 0.031     $ 0.027  
 
                
Weighted average common shares outstanding
                
Basic
     46,254       46,075  
Diluted
     46,280       46,093  

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We will host an investor and analyst conference call on Wednesday, April 22, 2009 at 9:30 a.m. (ET) to discuss the results of today’s earnings announcement. If you wish to participate in this call, please phone 866-383-8003 (US and Canada) or 617-597-5330 (International) and enter passcode number 12625802. 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 April 30, 2009 by phoning 888-286-8010 (US and Canada) or 617-801-6888 (International) and entering passcode number 13280858. 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, 2008. 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
  J. Todd Atenham
Waste Services, Inc.
  Investor Relations
Executive Vice President and Chief Financial Officer
  +1-888-917-5105
+1-905-319-1237
    

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WASTE SERVICES, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
                 
    Three Months Ended  
    March 31,  
    2009     2008  
Revenue
   $ 95,792     $ 116,609  
 
                
Operating and other expenses:
                
Cost of operations (exclusive of depreciation, depletion and amortization)
     63,208       76,544  
Selling, general and administrative expense (exclusive of depreciation, depletion and amortization)
     13,209       16,365  
Depreciation, depletion and amortization
     10,360       11,702  
Gain on sale of property and equipment, foreign exchange and other
     (3,310 )     (173 )
 
            
 
                
Income from operations
     12,325       12,171  
 
                
Interest expense
     7,498       10,238  
Change in fair value of warrants
     (1,771 )     —  
 
            
 
                
Income from continuing operations before income taxes
     6,598       1,933  
Income tax provision (benefit)
     2,588       (3,397 )
 
            
 
                
Income from continuing operations
     4,010       5,330  
Income from discontinued operations, net of income tax provision of $265 for the three months ended March 31, 2008
     —       409  
Gain on sale of discontinued operations, net of income tax provision of $4,549 for the three monthsended March 31, 2008
     —       6,969  
 
            
 
                
Net income
   $ 4,010     $ 12,708  
 
            
 
                
Basic and diluted earnings per share:
                
Earnings per share — continuing operations.
   $ 0.09     $ 0.12  
Earnings per share — discontinued operations.
     —       0.16  
 
            
Earnings per share — basic and diluted
   $ 0.09     $ 0.28  
 
            
 
                
Weighted average common shares outstanding:
                
Basic
     46,254       46,075  
Diluted
     46,280       46,093  

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WASTE SERVICES, INC.
SUPPLEMENTAL UNAUDITED BALANCE SHEET AND CASH FLOW DATA
(In thousands)
                 
    March 31,     December 31,  
    2009     2008  
Balance Sheet Data:
                
 
                
Cash
   $ 11,569     $ 7,227  
Current assets
   $ 70,975     $ 72,961  
Total assets
   $ 825,202     $ 840,927  
Current liabilities
   $ 89,346     $ 93,245  
Debt:
                
Senior secured credit facilities:
                
US Revolver
   $ 23,499     $ 34,600  
Canadian Revolver
     28,329       27,699  
US Term loan
     37,719       38,125  
Canadian Term Loan
     98,867       103,505  
Senior subordinated notes
     158,907       158,854  
Other notes
     8,961       9,286  
 
            
Total debt
   $ 356,282     $ 372,069  
Shareholders’ equity
   $ 336,419     $ 335,018  
                 
    Three Months Ended March 31,  
    2009     2008  
Cash Flow Data:
                
 
                
Net cash flows provided by continuing operations
   $ 16,905     $ 8,334  
Net cash flows provided by (used in) investing activities for continuing operations
   $ (1,007 )   $ 45,209  
Net cash flows used in financing activities of continuing operations
   $ (11,818 )   $ (42,859 )
Capital expenditures from continuing operations
   $ 6,944     $ 10,407  

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WASTE SERVICES, INC.
SUPPLEMENTAL UNAUDITED GROWTH RATES AND COUNTRY DATA
(In thousands)
Waste Services, Inc.
Revenue Growth
For The Three Months Ended March 31, 2009
(in thousands)
                 
Total Revenue, March 31, 2008
   $ 116,609          
Impact on revenue from changes in:
                
Price
     3,248       2.8 %
Fuel Surcharge
     (3,550 )     -3.0 %
Volume.
     (5,443 )     -4.7 %
Acquisition / Disposition
     481       0.4 %
Gain / Loss of Contracts
     (4,792 )     -4.1 %
Other
     113       0.1 %
Foreign currency impact
     (10,874 )     -9.3 %
 
                
 
              
Total Revenue, March 31, 2009
   $ 95,792          
 
              
COUNTRY DATA
(In thousands)
                                                 
    Three Months Ended March 31, 2009  
    US             Canada             Total          
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 continuing operations
   $ 8,932       17.8 %   $ 3,393       7.4 %   $ 12,325       12.9 %
 
                                          
                                                 
    Three Months Ended March 31, 2008  
    US             Canada             Total          
Revenue
   $ 60,090       100.0 %   $ 56,519       100.0 %   $ 116,609       100.0 %
Operating expenses:
                                                
Cost of operations
     38,916       64.8 %     37,628       66.6 %     76,544       65.6 %
Selling, general and administrative expense
     8,100       13.5 %     8,265       14.6 %     16,365       14.0 %
Depreciation, depletion and amortization
     6,759       11.2 %     4,943       8.7 %     11,702       10.1 %
Foreign exchange gain and other
     (200 )     -0.3 %     27       0.1 %     (173 )     -0.1 %
 
                                          
Income from continuing operations
   $ 6,515       10.8 %   $ 5,656       10.0 %   $ 12,171       10.4 %
 
                                          

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