WASTE CONNECTIONS REPORTS FIRST QUARTER 2024 RESULTS
- Strong start to 2024 on price-led organic growth in solid waste, improving operating trends and continued acquisition activity
-
Revenue of
$2.073 billion , above outlook and up 9.1% year over year -
Net income(a) of
$230.1 million and adjusted EBITDA(b) of$650.7 million , above outlook and up 14.8% year over year - Adjusted EBITDA margin of 31.4%, above outlook and up 160 basis points year over year
-
Net income and adjusted net income(b) of
$0.89 and$1.04 per share, respectively -
Net cash provided by operating activities of
$490.3 million and adjusted free cash flow(b) of$324.8 million -
Year-to-date acquired annualized revenue of over
$375 million
"We are extremely pleased by the strong start to the year driving better than expected operating and financial results, which, along with recently completed acquisitions, positions us well for the remainder of 2024. Adjusted EBITDA(b) margin expansion of 160 basis points to 31.4% in the seasonally weakest quarter of the year puts us on track to exceed our industry-leading full year outlook of 32.7%, as continuing improvements in employee retention and safety trends, along with rising commodity values, provide momentum for continued outperformance," said
"We're encouraged to see improvements in employee retention driving some of our best safety performance in years, with monthly incidents down to three-year lows in spite of outsized growth from acquisitions during that period," continued
Q1 2024 Results
Revenue in the first quarter totaled
Adjusted net income(b) in the first quarter was
Q1 2024 Earnings Conference Call
About
Safe Harbor and Forward-Looking Information
This press release contains forward-looking statements within the meaning of the safe harbor provisions of the
– financial tables attached –
CONTACT: |
|
|
|
---------------------------------------------------------------------------------------------------------------------------------------------------- |
(a)
All references to "Net income" refer to the financial statement line item "Net income attributable to |
CONDENSED CONSOLIDATED STATEMENTS OF NET INCOME
THREE MONTHS ENDED (Unaudited)
(in thousands of |
||||||
|
|
|
|
|
|
|
|
|
Three months ended |
||||
|
|
2023 |
|
2024 |
||
|
|
|
|
|
||
Revenues |
|
$ |
1,900,503 |
|
$ |
2,072,653 |
Operating expenses: |
|
|
|
|
|
|
Cost of operations |
|
|
1,146,941 |
|
|
1,221,783 |
Selling, general and administrative |
|
|
193,667 |
|
|
220,735 |
Depreciation |
|
|
204,059 |
|
|
222,691 |
Amortization of intangibles |
|
|
39,282 |
|
|
40,290 |
Impairments and other operating items |
|
|
1,865 |
|
|
354 |
Operating income |
|
|
314,689 |
|
|
366,800 |
|
|
|
|
|
|
|
Interest expense |
|
|
(68,353) |
|
|
(78,488) |
Interest income |
|
|
2,715 |
|
|
2,051 |
Other income (expense), net |
|
|
3,174 |
|
|
(1,823) |
Income before income tax provision |
|
|
252,225 |
|
|
288,540 |
|
|
|
|
|
|
|
Income tax provision |
|
|
(54,389) |
|
|
(59,413) |
Net income |
|
|
197,836 |
|
|
229,127 |
Plus (Less): Net loss (income) attributable to noncontrolling interests |
|
|
(23) |
|
|
927 |
Net income attributable to |
|
$ |
197,813 |
|
$ |
230,054 |
|
|
|
|
|
|
|
Earnings per common share attributable to |
|
|
|
|
|
|
Basic |
|
$ |
0.77 |
|
$ |
0.89 |
|
|
|
|
|
|
|
Diluted |
|
$ |
0.77 |
|
$ |
0.89 |
|
|
|
|
|
|
|
Shares used in the per share calculations: |
|
|
|
|
|
|
Basic |
|
|
257,372,942 |
|
|
257,801,116 |
Diluted |
|
|
257,988,971 |
|
|
258,482,473 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends per common share |
|
$ |
0.255 |
|
$ |
0.285 |
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(in thousands of |
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
ASSETS |
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
Cash and equivalents |
|
$ |
78,399 |
|
$ |
111,985 |
|
Accounts receivable, net of allowance for credit losses of |
|
|
856,953 |
|
|
896,682 |
|
Prepaid expenses and other current assets |
|
|
206,433 |
|
|
208,387 |
|
Total current assets |
|
|
1,141,785 |
|
|
1,217,054 |
|
|
|
|
|
|
|
|
|
Restricted cash |
|
|
105,639 |
|
|
105,683 |
|
Restricted investments |
|
|
70,350 |
|
|
74,655 |
|
Property and equipment, net |
|
|
7,228,331 |
|
|
7,827,304 |
|
Operating lease right-of-use assets |
|
|
261,782 |
|
|
273,371 |
|
|
|
|
7,404,400 |
|
|
7,597,175 |
|
Intangible assets, net |
|
|
1,603,541 |
|
|
1,877,226 |
|
Other assets, net |
|
|
100,048 |
|
|
110,192 |
|
Total assets |
|
$ |
17,915,876 |
|
$ |
19,082,660 |
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
Accounts payable |
|
$ |
642,455 |
|
$ |
589,861 |
|
Book overdraft |
|
|
14,855 |
|
|
14,584 |
|
Deferred revenue |
|
|
355,203 |
|
|
370,380 |
|
Accrued liabilities |
|
|
521,428 |
|
|
507,259 |
|
Current portion of operating lease liabilities |
|
|
32,533 |
|
|
36,430 |
|
Current portion of contingent consideration |
|
|
94,996 |
|
|
96,931 |
|
Current portion of long-term debt and notes payable |
|
|
26,462 |
|
|
16,096 |
|
Total current liabilities |
|
|
1,687,932 |
|
|
1,631,541 |
|
|
|
|
|
|
|
|
|
Long-term portion of debt and notes payable |
|
|
6,724,771 |
|
|
7,795,191 |
|
Long-term portion of operating lease liabilities |
|
|
238,440 |
|
|
249,419 |
|
Long-term portion of contingent consideration |
|
|
20,034 |
|
|
20,802 |
|
Deferred income taxes |
|
|
1,022,480 |
|
|
1,052,508 |
|
Other long-term liabilities |
|
|
524,438 |
|
|
542,239 |
|
Total liabilities |
|
|
10,218,095 |
|
|
11,291,700 |
|
Commitments and contingencies |
|
|
|
|
|
|
|
Equity: |
|
|
|
|
|
|
|
Common shares: 257,659,921 shares issued and 257,600,479 shares outstanding at |
|
|
3,276,661 |
|
|
3,279,130 |
|
Additional paid-in capital |
|
|
284,284 |
|
|
272,450 |
|
Accumulated other comprehensive loss |
|
|
(9,826) |
|
|
(62,836) |
|
|
|
|
- |
|
|
- |
|
Retained earnings |
|
|
4,141,690 |
|
|
4,298,171 |
|
Total |
|
|
7,692,809 |
|
|
7,786,915 |
|
Noncontrolling interest in subsidiaries |
|
|
4,972 |
|
|
4,045 |
|
Total equity |
|
|
7,697,781 |
|
|
7,790,960 |
|
Total liabilities and equity |
|
$ |
17,915,876 |
|
$ |
19,082,660 |
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED (Unaudited)
(in thousands of |
|||||||
|
|||||||
|
|
|
|
|
|
|
|
|
|
Three months ended March 31, |
|
||||
|
|
2023 |
|
2024 |
|
||
Cash flows from operating activities: |
|
|
|
|
|
|
|
Net income |
|
$ |
197,836 |
|
$ |
229,127 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
|
Loss on disposal of assets and impairments |
|
|
1,910 |
|
|
1,649 |
|
Depreciation |
|
|
204,059 |
|
|
222,691 |
|
Amortization of intangibles |
|
|
39,282 |
|
|
40,290 |
|
Deferred income taxes, net of acquisitions |
|
|
28,229 |
|
|
30,395 |
|
Current period provision for expected credit losses |
|
|
2,247 |
|
|
3,730 |
|
Amortization of debt issuance costs |
|
|
1,621 |
|
|
4,055 |
|
Share-based compensation |
|
|
18,469 |
|
|
21,952 |
|
Interest accretion |
|
|
4,884 |
|
|
11,279 |
|
Adjustments to contingent consideration |
|
|
(637) |
|
|
- |
|
Other |
|
|
(2,937) |
|
|
902 |
|
Net change in operating assets and liabilities, net of acquisitions |
|
|
(52,605) |
|
|
(75,761) |
|
Net cash provided by operating activities |
|
|
442,358 |
|
|
490,309 |
|
|
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
Payments for acquisitions, net of cash acquired |
|
|
(144,611) |
|
|
(1,156,422) |
|
Capital expenditures for property and equipment |
|
|
(175,786) |
|
|
(169,951) |
|
Proceeds from disposal of assets |
|
|
1,260 |
|
|
1,085 |
|
Other |
|
|
1,378 |
|
|
(9,291) |
|
Net cash used in investing activities |
|
|
(317,759) |
|
|
(1,334,579) |
|
|
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
Proceeds from long-term debt |
|
|
336,649 |
|
|
2,353,022 |
|
Principal payments on notes payable and long-term debt |
|
|
(320,027) |
|
|
(1,350,932) |
|
Payment of contingent consideration recorded at acquisition date |
|
|
(1,319) |
|
|
(11,295) |
|
Change in book overdraft |
|
|
5,421 |
|
|
(271) |
|
Payments for cash dividends |
|
|
(65,788) |
|
|
(73,573) |
|
Tax withholdings related to net share settlements of equity-based compensation |
|
|
(22,966) |
|
|
(30,850) |
|
Debt issuance costs |
|
|
- |
|
|
(10,093) |
|
Proceeds from issuance of shares under employee share purchase plan |
|
|
1,841 |
|
|
2,183 |
|
Proceeds from sale of common shares held in trust |
|
|
765 |
|
|
286 |
|
Net cash provided by (used in) financing activities |
|
|
(65,424) |
|
|
878,477 |
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
|
|
(54) |
|
|
(577) |
|
|
|
|
|
|
|
|
|
Net increase in cash, cash equivalents and restricted cash |
|
|
59,121 |
|
|
33,630 |
|
Cash, cash equivalents and restricted cash at beginning of period |
|
|
181,364 |
|
|
184,038 |
|
Cash, cash equivalents and restricted cash at end of period |
|
$ |
240,485 |
|
$ |
217,668 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADDITIONAL STATISTICS
(in thousands of
Solid Waste Internal Growth: The following table reflects a breakdown of the components of our solid waste internal growth for the three months ended
|
|
Three months ended
|
|
Core Price |
|
|
7.8 % |
Surcharges |
|
|
(0.7 %) |
Volume |
|
|
(3.8 %) |
Recycling |
|
|
0.8 % |
Foreign Exchange Impact |
|
|
0.0 % |
Total |
|
|
4.1 % |
Revenue Breakdown: The following table reflects a breakdown of our revenue for the three month periods ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|||||||||
|
|
Revenue |
|
Inter-company |
|
Reported |
|
% |
||||
Solid Waste Collection |
|
$ |
1,434,647 |
|
$ |
(5,514) |
|
$ |
1,429,133 |
|
75.2 |
% |
Solid Waste Disposal and Transfer |
|
|
616,954 |
|
|
(262,445) |
|
|
354,509 |
|
18.7 |
% |
|
|
|
31,301 |
|
|
(623) |
|
|
30,678 |
|
1.6 |
% |
E&P Waste Treatment, Recovery and Disposal |
|
|
51,759 |
|
|
(3,624) |
|
|
48,135 |
|
2.5 |
% |
Intermodal and Other |
|
|
38,212 |
|
|
(164) |
|
|
38,048 |
|
2.0 |
% |
Total |
|
$ |
2,172,873 |
|
$ |
(272,370) |
|
$ |
1,900,503 |
|
100.0 |
% |
|
|
Three months ended |
|
|||||||||
|
|
Revenue |
|
Inter-company |
|
Reported |
|
% |
||||
Solid Waste Collection |
|
$ |
1,515,060 |
|
$ |
(4,003) |
|
$ |
1,511,057 |
|
72.9 |
% |
Solid Waste Disposal and Transfer |
|
|
655,360 |
|
|
(282,978) |
|
|
372,382 |
|
17.9 |
% |
|
|
|
49,025 |
|
|
(1,839) |
|
|
47,186 |
|
2.3 |
% |
E&P Waste Treatment, Recovery and Disposal |
|
|
97,408 |
|
|
(4,543) |
|
|
92,865 |
|
4.5 |
% |
Intermodal and Other |
|
|
49,541 |
|
|
(378) |
|
|
49,163 |
|
2.4 |
% |
Total |
|
$ |
2,366,394 |
|
$ |
(293,741) |
|
$ |
2,072,653 |
|
100.0 |
% |
Contribution from Acquisitions: The following table reflects revenues from acquisitions, net of divestitures, for the three month periods ended
|
|
|
|
|
|
|
|
|
Three months ended |
||||
|
|
2023 |
|
2024 |
||
Acquisitions, net |
|
$ |
132,109 |
|
$ |
77,988 |
ADDITIONAL STATISTICS (continued)
(in thousands of
Other Cash Flow Items: The following table reflects cash interest and cash taxes for the three month periods ended
|
|
|
|
|
|
|
|
|
Three months ended |
||||
|
|
2023 |
|
2024 |
||
Cash Interest Paid |
|
$ |
55,131 |
|
$ |
66,384 |
Cash Taxes Paid |
|
|
11,326 |
|
|
28,406 |
Debt to Book Capitalization at
Internalization
for the three months ended
Days Sales Outstanding
for the three months ended
Share Information for the three months ended
|
|
|
Basic shares outstanding |
|
257,801,116 |
Dilutive effect of equity-based awards |
|
681,357 |
Diluted shares outstanding |
|
258,482,473 |
NON-GAAP RECONCILIATION SCHEDULE
(in thousands of
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
|
|
Three months ended |
||||
|
|
2023 |
|
2024 |
||
Net income attributable to |
|
$ |
197,813 |
|
$ |
230,054 |
Plus/(Less): Net income (loss) attributable to noncontrolling interests |
|
|
23 |
|
|
(927) |
Plus: Income tax provision |
|
|
54,389 |
|
|
59,413 |
Plus: Interest expense |
|
|
68,353 |
|
|
78,488 |
Less: Interest income |
|
|
(2,715) |
|
|
(2,051) |
Plus: Depreciation and amortization |
|
|
243,341 |
|
|
262,981 |
Plus: Closure and post-closure accretion |
|
|
4,520 |
|
|
9,405 |
Plus: Impairments and other operating items |
|
|
1,865 |
|
|
354 |
Plus/(Less): Other expense (income), net |
|
|
(3,174) |
|
|
1,823 |
Adjustments: |
|
|
|
|
|
|
Plus: Transaction-related expenses(a) |
|
|
2,081 |
|
|
9,847 |
Plus: Fair value changes to equity awards(b) |
|
|
373 |
|
|
1,286 |
Adjusted EBITDA |
|
$ |
566,869 |
|
$ |
650,673 |
|
|
|
|
|
|
|
As % of revenues |
|
|
29.8 % |
|
|
31.4 % |
____________________________ |
|
(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
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 liquidity measure in the solid waste industry.
|
|
Three months ended |
||||
|
|
2023 |
|
2024 |
||
Net cash provided by operating activities |
|
$ |
442,358 |
|
$ |
490,309 |
Plus/(Less): Change in book overdraft |
|
|
5,421 |
|
|
(271) |
Plus: Proceeds from disposal of assets |
|
|
1,260 |
|
|
1,085 |
Less: Capital expenditures for property and equipment |
|
|
(175,786) |
|
|
(169,951) |
Adjustments: |
|
|
|
|
|
|
Transaction-related expenses(a) |
|
|
1,249 |
|
|
4,976 |
Pre-existing Progressive Waste share-based grants(b) |
|
|
(2) |
|
|
14 |
Tax effect(c) |
|
|
(519) |
|
|
(1,369) |
Adjusted free cash flow |
|
$ |
273,981 |
|
$ |
324,793 |
|
|
|
|
|
|
|
As % of revenues |
|
|
14.4 % |
|
|
15.7 % |
___________________________ |
|
(a) |
Reflects the addback of acquisition-related transaction costs. |
(b) |
Reflects the cash settlement of pre-existing Progressive Waste share-based awards during the period. |
(c) |
The aggregate tax effect of footnotes (a) through (b) is calculated based on the applied tax rates for the respective periods. |
NON-GAAP RECONCILIATION SCHEDULE (continued)
(in thousands of
Reconciliation of Adjusted Net Income attributable to
Adjusted net income attributable to
|
|
|
|
|
|
|
|
|
Three months ended |
||||
|
|
2023 |
|
2024 |
||
Reported net income attributable to |
|
$ |
197,813 |
|
$ |
230,054 |
Adjustments: |
|
|
|
|
|
|
Amortization of intangibles(a) |
|
|
39,282 |
|
|
40,290 |
Impairments and other operating items(b) |
|
|
1,865 |
|
|
354 |
Transaction-related expenses(c) |
|
|
2,081 |
|
|
9,847 |
Fair value changes to equity awards(d) |
|
|
373 |
|
|
1,286 |
Tax effect(e) |
|
|
(11,024) |
|
|
(13,162) |
Adjusted net income attributable to |
|
$ |
230,390 |
|
$ |
268,669 |
Diluted earnings per common share attributable to |
|
|
|
|
|
|
Reported net income |
|
$ |
0.77 |
|
$ |
0.89 |
Adjusted net income |
|
$ |
0.89 |
|
$ |
1.04 |
____________________________ |
|
(a) |
Reflects the elimination of the non-cash amortization of acquisition-related intangible assets. |
(b) |
Reflects adjustments for 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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