Waste Connections, Inc. (TSE:WCN) Files An 8-K Regulation FD DisclosureItem 7.01
During our earnings conference call on July 26, 2017, we highlighted the following outlook for the third quarter 2017.
(Dollar amounts are approximations)
For the third quarter of the year, we estimate our revenue to be approximately $1.185 billion. We expect core price plus volume growth for solid waste to be between 3.0% and 3.5%. The third quarter will be the first period for organic growth figures to reflect a full quarter impact of the Progressive Waste acquisition. Net income attributable to Waste Connections is estimated to be approximately $135.3 million. Adjusted EBITDA, as reconciled below, is estimated to be approximately 32.6% of revenue, or about $386 million.
Q3 2017 OUTLOOK
NON-GAAP RECONCILIATION SCHEDULE
(in thousands of U.S. dollars, except where noted)
Reconciliation of Adjusted EBITDA:
| Q3 2017 Outlook | |||
| Estimate | Observation | ||
| Net income attributable to Waste Connections | $ | 135,250 | |
| Plus: Net income attributable to noncontrolling interests | |||
| Plus: Income tax provision | 55,400 | Approximate 29% effective rate | |
| Plus: Interest expense | 32,000 | ||
| Plus: Depreciation and depletion | 136,000 | Approximately 11.5% of revenue | |
| Plus: Amortization | 25,000 | Approximately 2.1% of revenue | |
| Plus: Closure and post-closure accretion | 3,000 | Approximately 0.25% of revenue | |
| Less: Interest income | (1,000 | ) | |
| Adjusted EBITDA | $ | 386,000 | Approximately 32.6% of revenue |
These estimates assume no change in the current economic and operating environment. They also exclude any rebranding costs or other items resulting from the Progressive Waste acquisition and any additional acquisitions or potential divestitures that may close during the period.
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 our operations. We define adjusted EBITDA as net income attributable to Waste Connections, plus net income attributable to noncontrolling interests, plus or minus income tax provision (benefit), plus interest expense, 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, plus foreign currency transaction loss, less foreign currency transaction gain. We further adjust this calculation to exclude the effects of other items management believes impact the ability to assess the operating performance of our 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.
The information furnished in Item 7.01 is not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, is not subject to the liabilities of that section, and is not deemed incorporated by reference in any filing under the Securities Act of 1933, as amended.
Safe Harbor and Forward-Looking Information
This document contains forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995 (PSLRA) and “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 are often identified by the words “may,” “might,” “believes,” “thinks,” “expects,” “intends” or other words of similar meaning. All of the forward-looking statements included in this document are made 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 document include, but are not limited to, statements about the Company’s expected third quarter 2017 financial results. 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 filings that have been made by the Company with the U.S. Securities and Exchange Commission 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 document. Waste Connections undertakes no obligation to update the forward-looking statements set forth in this document, whether as a result of new information, future events, or otherwise, unless required by applicable securities laws.
About Waste Connections, Inc. (TSE:WCN)
Waste Connections Inc, formerly Progressive Waste Solutions Ltd, is a Canada-based waste management company. The Company provides waste collection, recycling and disposal services to commercial, industrial, municipal and residential customers in over 10 states in the United States, and the District of Columbia, and in over six Canadian provinces. The Company operates through three segments: the East, the West and the North. The business segments are vertically integrated and their operations include the collection and disposal of waste and recyclable materials, transfer station operations, material recovery facilities, landfills and landfill gas to energy facilities. The Company offers various solutions for business, residential and public sector. The Company offers commercial, industrial and manufacturing, construction and demolition, and Leadership in Energy and Environmental Design (LEED) services, among others for business.