WSII Waste Services (MM)

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. BURLINGTON, Ontario, Oct. 27 /PRNewswire-FirstCall/ -- Waste Services, Inc. (NASDAQ:WSII) today announced financial results for the third quarter ended September 30, 2009. Fully diluted earnings per share from continuing operations were $0.15 for the quarter as compared to $0.08 in the third quarter of 2008. Revenue for the quarter was $112.5 million compared to $125.7 million for the same quarter in 2008. Income from continuing operations for the quarter was $6.7 million as compared to income in the comparative period of $3.5 million. The results for the quarter are highlighted by: -- 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. For the nine month period ended September 30, 2009, fully diluted earnings per share from continuing operations were $0.31 as compared to $0.28 in the corresponding period of 2008. Revenue for the period was $315.7 million compared to $370.6 million in 2008. Income from continuing operations for the period was $14.2 million as compared to income in the comparative period of $12.8 million. The results for the nine month period ended September 30, 2009 are highlighted by: -- 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. 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 $0.43 to $0.45 cents per share. Our recently announced strategic acquisitions in Miami 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." 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 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 ======= ======= ======= ======= The following table reconciles the differences between EBITDA from continuing operations and Adjusted EBITDA from continuing operations for the three and nine months ended September 30, 2009 and 2008 (in thousands) (unaudited). 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 ======= ======= ======= ======= (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. We will host an investor and analyst conference call on Wednesday, October 28, 2009 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 866-831-6267 (US and Canada) 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 http://www.wasteservicesinc.com/. A replay of the call will be available until November 10, 2009 by phoning 888-286-8010 (US and Canada) or 617-801-6888 (International) and entering passcode number 12206233. 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 http://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) Three Months Ended Nine Months Ended September 30, September 30, ------------- ------------- 2009 2008 2009 2008 ---- ---- ---- ---- Revenue $112,461 $125,745 $315,738 $370,635 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) -- --- ------ ---- Income from operations 17,239 16,521 43,325 45,527 Interest expense 7,528 7,730 22,418 25,770 Change in fair value of warrants (688) - (2,103) - ---- ---- ------ ---- 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 ----- ----- ----- ----- 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 ----- ----- ----- ----- Net income $6,717 $3,469 $14,173 $20,108 ====== ====== ======= ======= 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 ===== ===== ===== ===== Weighted average common shares outstanding: Basic 46,253 46,079 46,206 46,076 Diluted 46,302 46,088 46,231 46,085 WASTE SERVICES, INC. SUPPLEMENTAL UNAUDITED BALANCE SHEET AND CASH FLOW DATA (In thousands) Balance Sheet Data: September 30, December 31, 2009 2008 ---- ---- 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 Cash Flow Data: Nine Months Ended September 30, ----------------- 2009 2008 ---- ---- 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 WASTE SERVICES, INC. SUPPLEMENTAL UNAUDITED GROWTH RATES AND COUNTRY DATA (In thousands) 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) Total Revenue, Total Revenue, September 30, September 30, 2008 $125,745 2008 $370,635 Impact on Impact on revenue from revenue from changes in: changes in: 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% Total Revenue, Total Revenue, September 30, -------- September 30, -------- 2009 $112,461 2009 $315,738 ======== ======== COUNTRY DATA (In thousands) Three Months Ended September 30, 2009 --------------------------------------- US Canada Total -- ------ ------- 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% ====== ====== ======= Three Months Ended September 30, 2008 --------------------------------------- US Canada Total -- ------ ------- 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% ====== ======= ======= WASTE SERVICES, INC. UNAUDITED COUNTRY DATA (In thousands) Nine Months Ended September 30, 2009 -------------------------------------- US Canada Total -- ------ ------- 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% ======= ======= ======= Nine Months Ended September 30, 2008 -------------------------------------- US Canada Total -- ------ ------- 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% ======= ======= ======= DATASOURCE: Waste Services, Inc. CONTACT: 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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