(Source: MARKETWIRE)
Waste Connections, Inc. (NYSE: WCN) today announced its results for the second quarter of 2009. Revenue totaled $302.8 million, a 13.4% increase over revenue of $267.0 million in the year ago period. Operating income was $59.4 million versus $55.6 million in the second quarter of 2008. Net income attributable to Waste Connections in the quarter was $30.4 million, or $0.38 per share on a diluted basis of 80.8 million shares. In the year ago period, the Company reported net income attributable to Waste Connections of $25.6 million, or $0.38 on a diluted basis of 67.8 million shares. The year-over-year increase in diluted share count is due to an equity offering completed since the year ago period.
Non-cash costs for equity-based compensation, amortization of acquisition-related intangibles, and amortization of debt discount related to convertible debt instruments in connection with the adoption of FSP No. APB 14-1 on January 1, 2009, were $6.8 million ($4.3 million net of taxes, or approximately $0.05 per share) in the quarter compared to $4.4 million ($2.7 million net of taxes, or approximately $0.04 per share) in the year ago period.
SG&A in the current period included approximately $2.4 million ($1.5 million net of taxes) of expenses primarily related to the acquisition of divested assets from Republic Services, Inc., and, to a lesser extent, an additional loss on the Company's prior corporate office lease. Management also noted that current period results benefited approximately $3.0 million ($2.3 million net of taxes) from both a gain on the sale of certain assets and a 270 basis point decrease in the Company's effective tax rate primarily due to a reduction in deferred tax liabilities. In addition, the Company received written approval from the IRS in May to change its calculation of landfill depreciation for tax purposes.
"Stabilizing volumes, contribution from recently completed acquisitions, and aggressive expense management enabled us to exceed our expectations for the second quarter. In response to the precipitous drop in the economy in late 2008, we reduced our headcount by about 10%, including a company-wide reduction in force in April, and instituted a number of wage and cost controls. The relative stability we experienced in the recent quarter, together with our low financial leverage and strong free cash flow, provided us the comfort to resume our share repurchase program while retaining flexibility to fund our future growth strategy," said Ronald J. Mittelstaedt, Chairman and Chief Executive Officer.
Mr. Mittelstaedt added, "We completed the previously announced acquisitions of certain divested assets from Republic Services during the second quarter. In late June, we entered into an agreement to acquire Sanipac, Inc., the largest privately-owned solid waste services provider in Oregon. Closing of the Sanipac transaction, which remains subject to satisfaction of closing conditions, is expected to occur in the third quarter of 2009. With this transaction and others already completed, acquisition activity in the year totals approximately $165 million of annualized revenue."
* A non-GAAP measure; see accompanying Non-GAAP Reconciliation Schedule.
For the six months ended June 30, 2009, revenue was $565.5 million, a 9.3% increase over revenue of $517.3 million in the year ago period. Operating income was $107.1 million versus $106.4 million for the same period in 2008. Net income attributable to Waste Connections for the six months ended June 30, 2009, was $52.4 million, or $0.65 per share on a diluted basis of 80.8 million shares. In the year ago period, the Company reported net income attributable to Waste Connections of $48.0 million, or $0.71 on a diluted basis of 68.0 million shares.
For the six months ended June 30, 2009, non-cash costs for equity-based compensation, amortization of acquisition-related intangibles, and amortization of debt discount related to convertible debt instruments in connection with the adoption of FSP No. APB 14-1 on January 1, 2009, were $12.6 million ($7.8 million net of taxes, or approximately $0.10 per share) in the quarter compared to $9.0 million ($5.5 million net of taxes, or approximately $0.08 per share) in the year ago period.
SG&A for the six months ended June 30, 2009, included approximately $4.9 million ($3.0 million net of taxes) from previously discussed acquisition-related costs and a loss on the Company's prior corporate office lease due to the relocation of its corporate offices. Results during the current six month period also include an approximate $2.4 million ($2.0 million net of taxes) benefit from a gain on the sale of certain assets and a decrease in the Company's deferred tax liabilities.
Waste Connections will be hosting a conference call related to second quarter earnings and third quarter outlook on July 22nd at 8:30 A.M. Eastern Time. The call will be broadcast live over the Internet at www.streetevents.com or through a link on our website at www.wasteconnections.com. A playback of the call will be available at both of these websites.
On January 1, 2009, Waste Connections adopted SFAS No. 160, "Noncontrolling Interests in Consolidated Financial Statements - an amendment of ARB No. 51," the provisions of which, among others, require for all periods presented that (1) minority interests be renamed noncontrolling interests, (2) that a company present amounts of consolidated net income attributable to the parent and to the noncontrolling interests, and (3) that a company present such noncontrolling interests as equity. Financial statements for the current and prior year periods reflect the adoption of SFAS 160 related to such noncontrolling interests.
Waste Connections, Inc. is an integrated solid waste services company that provides solid waste collection, transfer, disposal and recycling services in mostly secondary markets in the Western and Southern U.S. The Company serves approximately two million residential, commercial and industrial customers from a network of operations in 26 states. The Company also provides intermodal services for the movement of containers in the Pacific Northwest. Waste Connections, Inc. was founded in September 1997 and is headquartered in Folsom, California.
For more information, visit the Waste Connections web site at www.wasteconnections.com. Copies of financial literature, including this release, are available on the Waste Connections web site or through contacting us directly at (916) 608-8200.
Cautionary Statement Regarding Forward-Looking Statements
Certain statements contained in this press release are forward-looking in nature, including statements related to our share repurchase program and our ability to fund our future growth, and statements related to the closing of the Sanipac acquisition. These statements can be identified by the use of forward-looking terminology such as "believes," "expects," "may," "will," "should," or "anticipates," or the negative thereof or comparable terminology, or by discussions of strategy. Our business and operations are subject to a variety of risks and uncertainties and, consequently, actual results may differ materially from those projected by any forward-looking statements.
