- Revenue of $1.352
billion, up 8.7%
- Reports 5.2% price +
volume growth
- Net income attributable to Waste
Connections of $143.0 million, or
$0.54 per share
-
Adjusted net income attributable to Waste Connections* of
$170.6 million, or $0.65 per share
- Adjusted
EBITDA* of $408.5 million, or 30.2%
of revenue
- Net cash provided by operating
activities of $369.6
million
- Adjusted free cash flow* of
$235.7 million, or 17.4% of
revenue
- Encouraged by improving solid waste
trends
TORONTO, May 6, 2020 /CNW/ -- Waste Connections, Inc.
(TSX/NYSE: WCN) ("Waste Connections" or the "Company") today
announced its results for the first quarter of 2020.
"We couldn't be any prouder of our Company's preparedness for
and execution during this pandemic, which should leave us
well-positioned when we emerge from it. An extremely strong
start to the year, which had put us firmly on track to exceed our
outlook, was interrupted in March by measures taken across the U.S.
and Canada to limit or control the
spread of COVID-19. In spite of the resulting significant
slowdown in economic activity and impact to revenue, we exceeded
our first quarter outlook for adjusted EBITDA* and delivered
adjusted free cash flow* of $235.7
million, or 17.4% of revenue and 57.7% of adjusted EBITDA*,
while also shifting our focus to one of preparedness," said
Worthing F. Jackman, President and
CEO.
"We recognized going into this period of uncertainty that our
communities would count on us as an essential services provider,
and we on each other, to honor our commitments. Protecting
the health, safety and welfare of our employees has guided every
decision we've made, knowing that reducing employee concerns
regarding income, healthcare and family obligations would be
critical to providing exceptional service. Our operating
performance during this period reflects the benefit of that focus
and is a testament to the dedication and tireless efforts of every
Waste Connections employee, whether in the field or working
remotely, which have been truly inspirational."
Mr. Jackman added, "We believe the financial impact of the
COVID-19 outbreak and the pace of recovery remain uncertain at this
time. The severity and duration of varying impacts across
markets, the shape of any economic recovery, and any additional
acquisitions completed during the year will influence the extent to
which our results are impacted. However, assuming that April
reflects the depths of any impact, we are encouraged that revenue
on a reported basis for the month declined 6.0% year-over-year, or
1.4% excluding Canada and the
Northeast U.S., which were hardest hit, and solid waste trends have
improved sequentially late in the month and into early May; a
continuing economic recovery should reduce the revenue impact going
forward. An approximate 20% reduction in budgeted capital
expenditures for the year and various cost controls will help
offset a portion of the high margin decremental and flow thru
associated with both pandemic-related decreases in commercial
collection activity and transfer and landfill volumes and a
reduction in E&P waste activity."
Mr. Jackman concluded, "Waste Connections is well-positioned to
navigate this unprecedented period. We remain disciplined in
executing our growth strategy and believe the strengths of our
culture, our people and our financial profile will continue to
differentiate our execution and financial performance."
* A non-GAAP measure; see accompanying Non-GAAP
Reconciliation Schedule
Financial Impact from COVID-19
During the first quarter of 2020, our business was impacted by
COVID-19 due to a reduction in revenue primarily in solid waste
commercial collection and solid waste transfer and disposal
resulting from a slowdown in activity associated with
shelter-in-place or other closure restrictions or requirements
imposed in response to the COVID-19 pandemic. This impact to
our business occurred in March, when commercial collection activity
slowed down in certain markets due to service reductions or
suspensions by customers whose business activity was curtailed by
such measures, with third party transfer and disposal volumes
typically following similar patterns to hauling activity. In
addition, and to a lesser extent, solid waste roll-off revenue was
impacted in some markets, and year-over-year revenue reductions in
our E&P segment resulting primarily from the drop in the value
of crude oil due to increased global supplies may also be related
to COVID-19. The impacts to solid waste activity that we
experienced during March varied by geography, the size and customer
mix in each market, and the timing and extent of shutdown
requirements across markets. In general, our markets in
Canada and the Northeast U.S. were
hardest hit. In the aggregate, the slowdown in activity is
estimated to have resulted in a decline of approximately
$12 million in revenue, with an
estimated impact of approximately 20 basis points to adjusted
EBITDA* margin, resulting in an impact of approximately
two cents per diluted share in the
quarter. As a result of the expected continued slowdown in
activity levels, we reduced projected 2020 capital expenditures by
approximately $110 million.
The second quarter will be the first full quarter to reflect the
impacts from COVID-19. In April, revenue on a reported basis
declined 6.0% year-over-year, or approximately 9.3% excluding
acquisitions completed since the year ago period. Adjusted
EBITDA* margin in April declined an estimated 200 basis points
year-over-year primarily due to incremental costs related to
COVID-19 and, to a lesser extent, a reduction in E&P waste
activity. Solid waste collection, transfer and disposal
revenue was down 6.9% year-over-year on a same store basis, or down
3.2% excluding Canada and the
Northeast U.S., which were hardest hit, and recent trends suggest
that such comparisons in subsequent months should show sequential
improvement. In late April, we saw mid to high single digit
percentage upticks off of weekly lows in solid waste landfill
volumes and roll-off activity, with over 70% of locations showing
improvement. Additionally, about 12% of solid waste
commercial customers and 9% of associated revenue in competitive
markets we track that had suspended or reduced service due to
COVID-19, have since reached out for either a resumption of service
or an increase in frequency. E&P waste revenue in April
was $14.2 million, down 33% from the
prior year.
The ultimate impact of the COVID-19 outbreak on our business,
results of operations, financial condition and cash flows will
depend largely on future developments, including the duration and
spread of the outbreak in the U.S. and Canada, its severity, the actions to contain
the novel coronavirus or treat its impact, and how quickly and to
what extent normal economic and operating conditions can resume,
all of which are uncertain and cannot be predicted at this
time.
Q1 2020 Results
Revenue in the first quarter totaled $1.352 billion, up from $1.245 billion in the year ago period.
Operating income was $217.0 million,
which included $3.7 million in
acquisition-related costs and $1.5
million in impairments and other items. This compares
to operating income of $184.9 million
in the first quarter of 2019, which included $16.1 million in impairments and other operating
items and $3.9 million in
acquisition-related costs.
Net income attributable to Waste Connections in the first
quarter was $143.0 million, or
$0.54 per share on a diluted basis of
264.4 million shares. In the year ago period, the Company
reported net income attributable to Waste Connections of
$125.6 million, or $0.48 per share on a diluted basis of 264.3
million shares.
Adjusted net income attributable to Waste Connections* in the
first quarter was $170.6 million, or
$0.65 per diluted share, versus
$163.9 million, or $0.62 per share, in the prior year period.
Adjusted EBITDA* in the first quarter was $408.5 million, as compared to adjusted EBITDA*
of $385.7 million in the prior year
period. Adjusted net income attributable to Waste
Connections, adjusted net income attributable to Waste Connections
per diluted share and adjusted EBITDA, all non-GAAP measures,
primarily exclude acquisition-related items, as reflected in the
detailed reconciliations in the attached tables.
* A non-GAAP measure; see accompanying Non-GAAP
Reconciliation Schedule
Q1 2020 Earnings Conference Call
Waste Connections will be hosting a conference call related to
first quarter earnings on May
7th at 8:30 A.M. Eastern
Time. To access the call, listeners should dial
800-954-0601 (within North
America) or 212-231-2907 (international) approximately 10
minutes prior to the scheduled start time and ask the operator for
the Waste Connections conference call (a passcode is not
required). A replay of the conference call will be available
until May 14, 2020 by calling
800-633-8284 (within North
America) or 402-977-9140 (international) and entering
Passcode # 21958916. The call will be broadcast live over the
Internet through a link on the Company's website at
www.wasteconnections.com. A playback of the call will be
available on the Company's website.
Waste Connections will be filing a Form 8-K on EDGAR and SEDAR
(as an "Other" document) prior to markets opening on May 7th, providing additional
information on recent solid waste trends and how they may impact
the Company's expectations for the full year.
About Waste Connections
Waste Connections is an integrated solid waste services company
that provides non-hazardous waste collection, transfer, disposal
and recycling services in mostly exclusive and secondary markets in
the United States and Canada. Through its R360 Environmental
Solutions subsidiary, Waste Connections is also a leading provider
of non-hazardous oilfield waste treatment, recovery and disposal
services in several of the most active natural resource producing
areas in the United States,
including the Permian, Bakken and Eagle Ford Basins. Waste
Connections serves more than seven million residential, commercial,
industrial, and exploration and production customers in 42 states
in the U.S., and six provinces in Canada. The Company also
provides intermodal services for the rail haul movement of cargo
and solid waste containers in the Pacific Northwest.
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
website or through contacting us directly at (905) 532-7510.
Investors can also obtain these materials and other documents filed
with the U.S. Securities and Exchange Commission ("SEC") and the
Canadian securities regulators free of charge at the SEC's website,
www.sec.gov, and at the System for Electronic Document Analysis and
Retrieval maintained by the Canadian Securities Administrators at
www.sedar.com.
Safe Harbor and Forward-Looking Information
This press release contains forward-looking statements within
the meaning of the safe harbor provisions of the U.S. Private
Securities Litigation Reform Act of 1995 ("PSLRA"), including
"forward-looking information" within the meaning of applicable
Canadian securities laws. These forward-looking statements are
neither historical facts nor assurances of future performance
and reflect Waste Connections' current beliefs and
expectations regarding future events and operating
performance. These forward-looking statements can be
identified by use of forward-looking terminology, such as
"believes," "expects," "intends," "may," "might," "will," "could,"
"should," or "anticipates," or the negative thereof or comparable
terminology, or by the discussions of strategy. All of the
forward-looking statements included in this press release are made
pursuant to the safe harbor provisions of the PSLRA and applicable
securities laws in Canada.
Forward-looking statements involve risks and uncertainties.
Forward-looking statements in this press release include, but are
not limited to, statements about the expected impacts of the recent
novel coronavirus pandemic and the COVID-19 outbreak, 2020
financial results, outlook, implications, expectations and related
assumptions, capital expenditures, and potential acquisition
activity. Important factors that could cause actual results to
differ, possibly materially, from those indicated by the
forward-looking statements include, but are not limited to, risk
factors detailed from time to time in the Company's filings with
the SEC and the securities commissions or similar regulatory
authorities in Canada. You should not place undue reliance on
forward-looking statements, which speak only as of the date of this
press release. Waste Connections undertakes no obligation to
update the forward-looking statements set forth in this press
release, whether as a result of new information, future events, or
otherwise, unless required by applicable securities laws.
– financial tables attached –
CONTACT:
|
|
Mary Anne Whitney /
(832) 442-2253
|
Joe Box / (281)
873-3205
|
maryannew@wasteconnections.com
|
joe.box@wasteconnections.com
|
WASTE CONNECTIONS,
INC.
CONDENSED
CONSOLIDATED STATEMENTS OF NET INCOME
THREE MONTHS ENDED
MARCH 31, 2019 AND 2020
(Unaudited)
(in thousands of U.S.
dollars, except share and per share amounts)
|
|
|
|
Three months ended
March 31,
|
|
|
|
|
2019
|
|
2020
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
1,244,637
|
|
$
|
1,352,404
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Cost of
operations
|
|
|
733,690
|
|
|
815,424
|
|
|
Selling, general and
administrative
|
|
|
132,586
|
|
|
136,052
|
|
|
Depreciation
|
|
|
146,847
|
|
|
150,821
|
|
|
Amortization of
intangibles
|
|
|
30,542
|
|
|
31,638
|
|
|
Impairments and other
operating items
|
|
|
16,112
|
|
|
1,506
|
|
|
Operating
income
|
|
|
184,860
|
|
|
216,963
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
(37,287)
|
|
|
(37,990)
|
|
|
Interest
income
|
|
|
3,311
|
|
|
2,175
|
|
|
Other income
(expense), net
|
|
|
2,661
|
|
|
(9,521)
|
|
|
Income before income
tax provision
|
|
|
153,545
|
|
|
171,627
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
provision
|
|
|
(27,968)
|
|
|
(28,734)
|
|
|
Net income
|
|
|
125,577
|
|
|
142,893
|
|
|
Plus: Net loss
attributable to noncontrolling interests
|
|
|
45
|
|
|
142
|
|
|
Net income
attributable to Waste Connections
|
|
$
|
125,622
|
|
$
|
143,035
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common
share attributable to Waste Connections' common
shareholders:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.48
|
|
$
|
0.54
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
$
|
0.48
|
|
$
|
0.54
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in the
per share calculations:
|
|
|
|
|
|
|
|
|
Basic
|
|
|
263,603,418
|
|
|
263,790,364
|
|
|
Diluted
|
|
|
264,336,930
|
|
|
264,353,158
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends per
common share
|
|
$
|
0.160
|
|
$
|
0.185
|
|
|
WASTE CONNECTIONS,
INC.
CONDENSED
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands of U.S.
dollars, except share and per share amounts)
|
|
|
|
December 31,
2019
|
|
March 31,
2020
|
|
ASSETS
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
Cash and
equivalents
|
|
$
|
326,738
|
|
$
|
1,195,279
|
|
Accounts receivable,
net of allowance for credit losses of $16,432 and $15,172 at
December 31, 2019 and March 31, 2020, respectively
|
|
|
662,808
|
|
|
624,389
|
|
Prepaid expenses and
other current assets
|
|
|
141,052
|
|
|
142,553
|
|
Total current
assets
|
|
|
1,130,598
|
|
|
1,962,221
|
|
Restricted
cash
|
|
|
96,483
|
|
|
88,927
|
|
Restricted
investments
|
|
|
51,179
|
|
|
45,856
|
|
Property and
equipment, net
|
|
|
5,516,347
|
|
|
5,415,989
|
|
Operating lease
right-of-use assets
|
|
|
183,220
|
|
|
176,772
|
|
Goodwill
|
|
|
5,510,851
|
|
|
5,385,841
|
|
Intangible assets,
net
|
|
|
1,163,063
|
|
|
1,120,197
|
|
Other assets,
net
|
|
|
85,954
|
|
|
83,608
|
|
Total
assets
|
|
$
|
13,737,695
|
|
$
|
14,279,411
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
436,970
|
|
$
|
398,523
|
|
Book
overdraft
|
|
|
15,954
|
|
|
12,105
|
|
Accrued
liabilities
|
|
|
280,808
|
|
|
297,266
|
|
Current portion of
operating lease liabilities
|
|
|
29,929
|
|
|
29,741
|
|
Current portion of
contingent consideration
|
|
|
26,659
|
|
|
37,549
|
|
Deferred
revenue
|
|
|
216,443
|
|
|
210,668
|
|
Current portion of
long-term debt and notes payable
|
|
|
465
|
|
|
4,318
|
|
Total current
liabilities
|
|
|
1,007,228
|
|
|
990,170
|
|
|
|
|
|
|
|
|
|
Long-term portion of
debt and notes payable
|
|
|
4,353,782
|
|
|
5,160,735
|
|
Long-term portion of
operating lease liabilities
|
|
|
160,033
|
|
|
153,640
|
|
Long-term portion of
contingent consideration
|
|
|
42,825
|
|
|
30,050
|
|
Deferred income
taxes
|
|
|
818,622
|
|
|
817,331
|
|
Other long-term
liabilities
|
|
|
416,851
|
|
|
440,399
|
|
Total
liabilities
|
|
|
6,799,341
|
|
|
7,592,325
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
Common shares:
263,699,675 shares issued and 263,618,161 shares outstanding at
December 31, 2019; 262,878,701 shares issued and 262,804,517
shares outstanding at March 31, 2020
|
|
|
4,135,343
|
|
|
4,030,368
|
|
Additional paid-in
capital
|
|
|
154,917
|
|
|
141,438
|
|
Accumulated other
comprehensive loss
|
|
|
(10,963)
|
|
|
(238,652)
|
|
Treasury shares:
81,514 and 74,184 shares at December 31, 2019 and March 31,
2020, respectively
|
|
|
-
|
|
|
-
|
|
Retained
earnings
|
|
|
2,654,207
|
|
|
2,749,224
|
|
Total Waste
Connections' equity
|
|
|
6,933,504
|
|
|
6,682,378
|
|
Noncontrolling
interest in subsidiaries
|
|
|
4,850
|
|
|
4,708
|
|
Total
equity
|
|
|
6,938,354
|
|
|
6,687,086
|
|
|
|
$
|
13,737,695
|
|
$
|
14,279,411
|
|
WASTE CONNECTIONS,
INC.
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED
MARCH 31, 2019 AND 2020
(Unaudited)
(in thousands of U.S.
dollars)
|
|
|
|
Three months ended March 31,
|
|
|
|
2019
|
|
2020
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
Net income
|
|
$
|
125,577
|
|
$
|
142,893
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
Loss on disposal of
assets and impairments
|
|
|
16,372
|
|
|
135
|
|
Depreciation
|
|
|
146,847
|
|
|
150,821
|
|
Amortization of
intangibles
|
|
|
30,542
|
|
|
31,638
|
|
Amortization of
leases
|
|
|
7,214
|
|
|
5,353
|
|
Deferred income taxes,
net of acquisitions
|
|
|
10,126
|
|
|
23,259
|
|
Amortization of debt
issuance costs
|
|
|
1,148
|
|
|
3,420
|
|
Share-based
compensation
|
|
|
15,168
|
|
|
13,046
|
|
Interest
accretion
|
|
|
3,972
|
|
|
4,352
|
|
Adjustments to
contingent consideration
|
|
|
1,466
|
|
|
-
|
|
Other
|
|
|
(145)
|
|
|
2,308
|
|
Net change in
operating assets and liabilities, net of acquisitions
|
|
|
5,485
|
|
|
(7,639)
|
|
Net cash provided by
operating activities
|
|
|
363,772
|
|
|
369,586
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
Payments for
acquisitions, net of cash acquired
|
|
|
(14,920)
|
|
|
(5,943)
|
|
Capital expenditures
for property and equipment
|
|
|
(114,238)
|
|
|
(137,781)
|
|
Proceeds from disposal
of assets
|
|
|
639
|
|
|
3,499
|
|
Change in restricted
investments, net of interest income
|
|
|
-
|
|
|
4,348
|
|
Other
|
|
|
473
|
|
|
2,251
|
|
Net cash used in
investing activities
|
|
|
(128,046)
|
|
|
(133,626)
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
Proceeds from
long-term debt
|
|
|
55,354
|
|
|
1,790,625
|
|
Principal payments on
notes payable and long-term debt
|
|
|
(52,051)
|
|
|
(970,393)
|
|
Payment of contingent
consideration recorded at acquisition date
|
|
|
(275)
|
|
|
(1,976)
|
|
Change in book
overdraft
|
|
|
(2,784)
|
|
|
(3,848)
|
|
Payments for
repurchase of common shares
|
|
|
-
|
|
|
(105,654)
|
|
Payments for cash
dividends
|
|
|
(42,084)
|
|
|
(48,018)
|
|
Tax withholdings
related to net share settlements of equity-based
compensation
|
|
|
(16,973)
|
|
|
(23,090)
|
|
Debt issuance
costs
|
|
|
-
|
|
|
(10,936)
|
|
Proceeds from sale of
common shares held in trust
|
|
|
3,610
|
|
|
679
|
|
Net cash provided by
(used in) financing activities
|
|
|
(55,203)
|
|
|
627,389
|
|
Effect of exchange
rate changes on cash, cash equivalents and restricted
cash
|
|
|
193
|
|
|
(2,364)
|
|
Net increase in cash,
cash equivalents and restricted cash
|
|
|
180,716
|
|
|
860,985
|
|
Cash, cash
equivalents and restricted cash at beginning of period
|
|
|
403,966
|
|
|
423,221
|
|
Cash, cash
equivalents and restricted cash at end of period
|
|
$
|
584,682
|
|
$
|
1,284,206
|
|
ADDITIONAL STATISTICS
(in thousands of
U.S. dollars, except where noted)
Solid Waste Internal Growth: The following table
reflects a breakdown of the components of our solid waste internal
growth for the three months ended March 31,
2020:
|
|
U.S.
|
|
Canada
|
|
Total
|
Core Price
|
|
5.2%
|
|
7.2%
|
|
5.5%
|
Surcharges
|
|
0.1%
|
|
0.7%
|
|
0.1%
|
Volume
|
|
0.2%
|
|
(3.9%)
|
|
(0.4%)
|
Recycling
|
|
(0.3%)
|
|
(0.9%)
|
|
(0.4%)
|
Foreign Exchange
Impact
|
|
-
|
|
(1.0%)
|
|
(0.1%)
|
Total
|
|
5.2%
|
|
2.1%
|
|
4.7%
|
Revenue Breakdown: The following table reflects a
breakdown of our revenue for the three month periods ended
March 31, 2019 and 2020:
|
|
Three months ended March 31,
2019
|
|
|
Revenue
|
|
Inter-company
Elimination
|
|
Reported
Revenue
|
|
%
|
Solid Waste
Collection
|
|
$
|
891,353
|
|
$
|
(2,176)
|
|
$
|
889,177
|
|
71.4%
|
Solid Waste Disposal
and Transfer
|
|
|
405,791
|
|
|
(165,046)
|
|
|
240,745
|
|
19.3%
|
Solid Waste
Recycling
|
|
|
19,804
|
|
|
(504)
|
|
|
19,300
|
|
1.6%
|
E&P Waste
Treatment, Recovery and Disposal
|
|
|
66,831
|
|
|
(3,694)
|
|
|
63,137
|
|
5.1%
|
Intermodal and
Other
|
|
|
32,837
|
|
|
(559)
|
|
|
32,278
|
|
2.6%
|
Total
|
|
$
|
1,416,616
|
|
$
|
(171,979)
|
|
$
|
1,244,637
|
|
100.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended March 31, 2020
|
|
|
Revenue
|
|
Inter-company
Elimination
|
|
Reported
Revenue
|
|
%
|
Solid Waste
Collection
|
|
$
|
989,009
|
|
$
|
(3,404)
|
|
$
|
985,605
|
|
72.9%
|
Solid Waste Disposal
and Transfer
|
|
|
446,983
|
|
|
(187,066)
|
|
|
259,917
|
|
19.2%
|
Solid Waste
Recycling
|
|
|
18,108
|
|
|
(552)
|
|
|
17,556
|
|
1.3%
|
E&P Waste
Treatment, Recovery and Disposal
|
|
|
65,377
|
|
|
(6,027)
|
|
|
59,350
|
|
4.4%
|
Intermodal and
Other
|
|
|
30,018
|
|
|
(42)
|
|
|
29,976
|
|
2.2%
|
Total
|
|
$
|
1,549,495
|
|
$
|
(197,091)
|
|
$
|
1,352,404
|
|
100.0%
|
Contribution from Acquisitions: The following table
reflects revenues from acquisitions, net of divestitures, for the
three month periods ended March 31,
2019 and 2020:
|
|
Three months
ended
March 31,
|
|
|
2019
|
|
2020
|
Acquisitions,
net
|
|
$
|
68,985
|
|
$
|
59,568
|
|
ADDITIONAL STATISTICS (continued)
(in
thousands of U.S. dollars, except where noted)
Other Cash Flow Items: The following table reflects cash
interest and cash taxes for the three month periods ended
March 31, 2019 and 2020:
|
|
Three months
ended
March 31,
|
|
|
|
2019
|
|
2020
|
|
Cash Interest
Paid
|
|
$
|
22,174
|
|
$
|
17,046
|
|
Cash Taxes
Paid
|
|
|
6,411
|
|
|
4,610
|
|
Debt to Book Capitalization as of March 31, 2020: 44%
Internalization for the three months ended
March 31, 2020: 56%
Days Sales Outstanding for the three months ended
March 31, 2020: 42 (28 net
of deferred revenue)
Share Information for the three months ended March 31, 2020:
Basic shares
outstanding
|
|
263,790,364
|
Dilutive effect of
equity-based awards
|
|
562,794
|
Diluted shares
outstanding
|
|
264,353,158
|
NON-GAAP RECONCILIATION SCHEDULE
(in
thousands of U.S. dollars, except where noted)
Reconciliation of Adjusted EBITDA:
Adjusted EBITDA, a non-GAAP financial measure, is provided
supplementally because it is widely used by investors as a
performance and valuation measure in the solid waste
industry. Management uses adjusted EBITDA as one of the
principal measures to evaluate and monitor the ongoing financial
performance of Waste Connections' operations. Waste
Connections defines adjusted EBITDA as net income attributable to
Waste Connections, plus or minus net income (loss) attributable to
noncontrolling interests, plus income tax provision, plus interest
expense, less interest income, plus depreciation and amortization
expense, plus closure and post-closure accretion expense, plus or
minus any loss or gain on impairments and other operating items,
plus other expense, less other income. Waste Connections
further adjusts this calculation to exclude the effects of other
items management believes impact the ability to assess the
operating performance of its business. This measure is not a
substitute for, and should be used in conjunction with, GAAP
financial measures. Other companies may calculate adjusted
EBITDA differently.
|
|
Three months
ended
March 31,
|
|
|
|
2019
|
|
2020
|
|
Net income
attributable to Waste Connections
|
|
$
|
125,622
|
|
$
|
143,035
|
|
Less: Net loss
attributable to noncontrolling interests
|
|
|
(45)
|
|
|
(142)
|
|
Plus: Income tax
provision
|
|
|
27,968
|
|
|
28,734
|
|
Plus: Interest
expense
|
|
|
37,287
|
|
|
37,990
|
|
Less: Interest
income
|
|
|
(3,311)
|
|
|
(2,175)
|
|
Plus: Depreciation
and amortization
|
|
|
177,389
|
|
|
182,459
|
|
Plus: Closure and
post-closure accretion
|
|
|
3,490
|
|
|
3,908
|
|
Plus: Impairments and
other operating items
|
|
|
16,112
|
|
|
1,506
|
|
Plus/(Less): Other
expense (income), net
|
|
|
(2,661)
|
|
|
9,521
|
|
Adjustments:
|
|
|
|
|
|
|
|
Plus:
Transaction-related expenses (a)
|
|
|
837
|
|
|
1,146
|
|
Plus: Fair value
changes to equity awards (b)
|
|
|
3,021
|
|
|
2,541
|
|
Adjusted
EBITDA
|
|
$
|
385,709
|
|
$
|
408,523
|
|
|
|
|
|
|
|
|
|
As % of
revenues
|
|
|
31.0%
|
|
|
30.2%
|
|
|
|
|
|
|
|
(a)
|
Reflects the addback
of acquisition-related transaction costs.
|
(b)
|
Reflects fair value
accounting changes associated with certain equity
awards.
|
|
|
NON-GAAP RECONCILIATION SCHEDULE
(continued)
(in thousands of U.S. dollars, except where
noted)
Reconciliation of Adjusted Free Cash Flow:
Adjusted free cash flow, a non-GAAP financial measure, is
provided supplementally because it is widely used by investors as a
valuation and liquidity measure in the solid waste industry.
Management uses adjusted free cash flow as one of the principal
measures to evaluate and monitor the ongoing financial performance
of Waste Connections' operations. Waste Connections defines
adjusted free cash flow as net cash provided by operating
activities, plus or minus change in book overdraft, plus proceeds
from disposal of assets, less capital expenditures for property and
equipment and distributions to noncontrolling interests.
Waste Connections further adjusts this calculation to exclude the
effects of items management believes impact the ability to assess
the operating performance of its business. This measure is
not a substitute for, and should be used in conjunction with, GAAP
liquidity or financial measures. Other companies may
calculate adjusted free cash flow differently.
|
|
|
|
|
|
|
|
|
|
Three months
ended
March 31,
|
|
|
|
2019
|
|
2020
|
|
Net cash provided by
operating activities
|
|
$
|
363,772
|
|
$
|
369,586
|
|
Less: Change in book
overdraft
|
|
|
(2,784)
|
|
|
(3,848)
|
|
Plus: Proceeds from
disposal of assets
|
|
|
639
|
|
|
3,499
|
|
Less: Capital
expenditures for property and equipment
|
|
|
(114,238)
|
|
|
(137,781)
|
|
Adjustments:
|
|
|
|
|
|
|
|
Cash received for
divestitures (a)
|
|
|
(2,376)
|
|
|
-
|
|
Transaction-related
expenses (b)
|
|
|
837
|
|
|
1,146
|
|
Pre-existing
Progressive Waste share-based grants (c)
|
|
|
2,182
|
|
|
6,440
|
|
Tax effect
(d)
|
|
|
(1,697)
|
|
|
(3,318)
|
|
Adjusted free cash
flow
|
|
$
|
246,335
|
|
$
|
235,724
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Reflects the
elimination of cash received in conjunction with the divestiture of
certain Progressive Waste operations.
|
(b)
|
Reflects the addback
of acquisition-related transaction costs.
|
(c)
|
Reflects the cash
settlement of pre-existing Progressive Waste share-based awards
during the period.
|
(d)
|
The aggregate tax
effect of footnotes (a) through (c) is calculated based on the
applied tax rates for the respective periods.
|
|
|
NON-GAAP RECONCILIATION SCHEDULE
(continued)
(in thousands of U.S. dollars, except per share
amounts)
Reconciliation of Adjusted Net Income attributable to Waste
Connections and Adjusted Net Income per Diluted Share attributable
to Waste Connections:
Adjusted net income attributable to Waste Connections and
adjusted net income per diluted share attributable to Waste
Connections, both non-GAAP financial measures, are provided
supplementally because they are widely used by investors as a
valuation measure in the solid waste industry. Management
uses adjusted net income attributable to Waste Connections and
adjusted net income per diluted share attributable to Waste
Connections as one of the principal measures to evaluate and
monitor the ongoing financial performance of Waste Connections'
operations. Waste Connections provides adjusted net income
attributable to Waste Connections to exclude the effects of items
management believes impact the comparability of operating results
between periods. Adjusted net income attributable to Waste
Connections has limitations due to the fact that it excludes items
that have an impact on the Company's financial condition and
results of operations. Adjusted net income attributable to
Waste Connections and adjusted net income per diluted share
attributable to Waste Connections are not a substitute for, and
should be used in conjunction with, GAAP financial measures.
Other companies may calculate these non-GAAP financial measures
differently.
|
|
Three months
ended March 31,
|
|
|
2019
|
|
2020
|
Reported net income
attributable to Waste Connections
|
|
$
|
125,622
|
|
$
|
143,035
|
Adjustments:
|
|
|
|
|
|
|
Amortization of
intangibles (a)
|
|
|
30,542
|
|
|
31,638
|
Impairments and other
operating items (b)
|
|
|
16,112
|
|
|
1,506
|
Transaction-related
expenses (c)
|
|
|
837
|
|
|
1,146
|
Fair value changes to
equity awards (d)
|
|
|
3,021
|
|
|
2,541
|
Tax effect
(e)
|
|
|
(12,197)
|
|
|
(9,304)
|
Adjusted net income
attributable to Waste Connections
|
|
$
|
163,937
|
|
$
|
170,562
|
Diluted earnings per
common share attributable to Waste Connections' common
shareholders:
|
|
|
|
|
|
|
Reported net
income
|
|
$
|
0.48
|
|
$
|
0.54
|
Adjusted net
income
|
|
$
|
0.62
|
|
$
|
0.65
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Reflects the
elimination of the non-cash amortization of acquisition-related
intangible assets.
|
(b)
|
Reflects the addback
of impairments and other operating items.
|
(c)
|
Reflects the addback
of acquisition-related transaction costs.
|
(d)
|
Reflects fair value
accounting changes associated with certain equity
awards.
|
(e)
|
The aggregate tax
effect of the adjustments in footnotes (a) through (d) is
calculated based on the applied tax rates for the respective
periods.
|
|
|
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SOURCE Waste Connections, Inc.