FOURTH QUARTER HIGHLIGHTS COMPARED TO PRIOR YEAR:
- Total revenue increases 8% to
$261.4 million - Waste Solutions Base Business grows 9% on improving underlying fundamentals
- Waste Solutions Event Business rebounds with 15% growth
- Field Services segment revenue declines 4% due to difficult comparison to prior year
- Energy Waste recovery continues; revenue more than doubles and adjusted EBITDA margin improves to 35%
- Net Income of
$3.6 million , earnings per diluted share of$0.11 - Adjusted EBITDA of
$42.1 million - Adjusted free cash flow of
$16.5 million
“We are encouraged by the improvement in our underlying business activity, which drove sequential improvement in revenue in the fourth quarter despite continued supply chain and pandemic-related issues,” commented Chairman and Chief Executive Officer,
Feeler continued, “We are pleased with the continued momentum in our Energy Waste segment, which led to revenue for the fourth quarter more than doubling from a year ago to over
FOURTH QUARTER 2021 RESULTS
Revenue was
Revenue for the Waste Solutions segment was
Revenue for the Field Services segment was
Revenue for the Energy Waste segment increased to
Net income was
Cash earnings per diluted share was
Definitions and reconciliations of net income (loss) to adjusted EBITDA, earnings (loss) per diluted share to adjusted earnings per diluted share, earnings (loss) per diluted share to cash earnings per diluted share, and net cash provided by operating activities to adjusted free cash flow are attached as Exhibit A to this release.
YEAR-TO-DATE RESULTS
Revenue for 2021 grew 6% to
Net income was
Cash earnings per diluted share was
Adjusted free cash flow was
Definitions and reconciliations of net income (loss) to adjusted EBITDA, earnings (loss) per diluted share to adjusted earnings per diluted share, earnings (loss) per diluted share to cash earnings per diluted share, and net cash provided by operating activities to adjusted free cash flow are attached as Exhibit A to this release.
REPUBLIC SERVICES TRANSACTION
On
CANCELLATION OF EARNINGS CONFERENCE CALLS AND SUSPENSION OF GUIDANCE
In light of the pending transaction with Republic Services, Inc., the Company has cancelled its quarterly earnings conference calls. The Company will not be providing financial guidance for the full year 2022 while the transaction is pending.
ABOUT
INFORMATION REGARDING FORWARD-LOOKING STATEMENTS
This communication contains “forward-looking statements” within the meaning of the
ADDITIONAL INFORMATION AND WHERE TO FIND IT
This communication may be deemed to be solicitation material in respect of the proposed merger between a subsidiary of Republic Services, Inc. and
CERTAIN INFORMATION CONCERNING PARTICIPANTS
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
(in thousands, except per share data) | ||||||||||||||||
(unaudited) | ||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Revenue | ||||||||||||||||
Waste Solutions | $ | 123,542 | $ | 105,729 | $ | 451,249 | $ | 425,413 | ||||||||
Field Services | 125,693 | 130,536 | 500,187 | 473,754 | ||||||||||||
Energy Waste | 12,192 | 4,809 | 36,565 | 34,687 | ||||||||||||
Total | 261,427 | 241,074 | 988,001 | 933,854 | ||||||||||||
Gross profit | ||||||||||||||||
Waste Solutions | 44,058 | 38,299 | 154,223 | 161,341 | ||||||||||||
Field Services | 15,538 | 29,178 | 74,087 | 87,151 | ||||||||||||
Energy Waste | 2,902 | 922 | 4,768 | 1,659 | ||||||||||||
Total | 62,498 | 68,399 | 233,078 | 250,151 | ||||||||||||
Selling, general & administrative expenses | ||||||||||||||||
Waste Solutions | 7,520 | 6,633 | 27,262 | 26,475 | ||||||||||||
Field Services | 11,390 | 12,704 | 48,210 | 50,572 | ||||||||||||
Energy Waste | 3,065 | 6,265 | 13,040 | 19,722 | ||||||||||||
Corporate | 27,537 | 27,356 | 111,220 | 109,400 | ||||||||||||
Total | 49,512 | 52,958 | 199,732 | 206,169 | ||||||||||||
Field Services | - | 24,300 | - | 41,000 | ||||||||||||
Energy Waste | - | 80,300 | - | 363,900 | ||||||||||||
Operating income (loss) | 12,986 | (89,159 | ) | 33,346 | (360,918 | ) | ||||||||||
Other income (expense): | ||||||||||||||||
Interest income | 269 | 7 | 1,417 | 258 | ||||||||||||
Interest expense | (6,944 | ) | (7,468 | ) | (28,966 | ) | (32,595 | ) | ||||||||
Foreign currency gain (loss) | 214 | (979 | ) | (171 | ) | (1,134 | ) | |||||||||
Other | 456 | 406 | 4,476 | 788 | ||||||||||||
Total other expense | (6,005 | ) | (8,034 | ) | (23,244 | ) | (32,683 | ) | ||||||||
Income (loss) before income taxes | 6,981 | (97,193 | ) | 10,102 | (393,601 | ) | ||||||||||
Income tax expense (benefit) | 3,417 | (4,784 | ) | 4,765 | (4,242 | ) | ||||||||||
Net income (loss) | $ | 3,564 | $ | (92,409 | ) | $ | 5,337 | $ | (389,359 | ) | ||||||
Earnings (loss) per share: | ||||||||||||||||
Basic | $ | 0.11 | $ | (2.97 | ) | $ | 0.17 | $ | (12.51 | ) | ||||||
Diluted | $ | 0.11 | $ | (2.97 | ) | $ | 0.17 | $ | (12.51 | ) | ||||||
Shares used in earnings (loss) per share calculation: | ||||||||||||||||
Basic | 31,158 | 31,078 | 31,138 | 31,126 | ||||||||||||
Diluted | 31,359 | 31,078 | 31,373 | 31,126 | ||||||||||||
Dividends paid per share | $ | - | $ | - | $ | - | $ | 0.18 | ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
(in thousands) | ||||||||
(unaudited) | ||||||||
Assets | ||||||||
Current Assets: | ||||||||
Cash and cash equivalents | $ | 67,487 | $ | 73,848 | ||||
Receivables, net | 250,154 | 241,978 | ||||||
Prepaid expenses and other current assets | 32,136 | 28,379 | ||||||
Income tax receivable | 14,441 | 18,279 | ||||||
Total current assets | 364,218 | 362,484 | ||||||
Property and equipment, net | 456,384 | 456,637 | ||||||
Operating lease assets | 43,607 | 51,474 | ||||||
Restricted cash and investments | 1,567 | 5,598 | ||||||
Intangible assets, net | 489,573 | 523,988 | ||||||
413,126 | 413,037 | |||||||
Other assets | 36,923 | 18,065 | ||||||
Total assets | $ | 1,805,398 | $ | 1,831,283 | ||||
Liabilities and Stockholders’ Equity | ||||||||
Current Liabilities: | ||||||||
Accounts payable | $ | 64,793 | $ | 35,881 | ||||
Deferred revenue | 15,950 | 15,267 | ||||||
Accrued liabilities | 51,265 | 59,296 | ||||||
Accrued salaries and benefits | 29,438 | 30,918 | ||||||
Income tax payable | 559 | 977 | ||||||
Current portion of long-term debt | 3,359 | 3,359 | ||||||
Current portion of closure and post-closure obligations | 5,771 | 6,471 | ||||||
Current portion of operating lease liabilities | 15,799 | 17,048 | ||||||
Total current liabilities | 186,934 | 169,217 | ||||||
Long-term debt | 735,125 | 782,484 | ||||||
Long-term closure and post-closure obligations | 93,149 | 89,398 | ||||||
Long-term operating lease liabilities | 28,477 | 35,069 | ||||||
Other long-term liabilities | 13,907 | 32,201 | ||||||
Deferred income taxes, net | 123,482 | 120,983 | ||||||
Total liabilities | 1,181,074 | 1,229,352 | ||||||
Commitments and contingencies | ||||||||
Stockholders’ Equity | ||||||||
Common stock | 315 | 315 | ||||||
Additional paid-in capital | 821,970 | 820,567 | ||||||
Retained deficit | (183,115 | ) | (188,452 | ) | ||||
(10,652 | ) | (15,841 | ) | |||||
Accumulated other comprehensive loss | (4,194 | ) | (14,658 | ) | ||||
Total stockholders’ equity | 624,324 | 601,931 | ||||||
Total liabilities and stockholders’ equity | $ | 1,805,398 | $ | 1,831,283 | ||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
(in thousands) | ||||||||
(unaudited) | ||||||||
For the Year Ended | ||||||||
2021 | 2020 | |||||||
Cash Flows From Operating Activities: | ||||||||
Net income (loss) | $ | 5,337 | $ | (389,359 | ) | |||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||
Depreciation and amortization of property and equipment | 70,799 | 66,561 | ||||||
Amortization of intangible assets | 34,614 | 37,344 | ||||||
Accretion of closure and post-closure obligations | 5,363 | 4,000 | ||||||
Change in fair value of minority interest investment | (3,509 | ) | - | |||||
Unrealized foreign currency gain | (1,647 | ) | (1,472 | ) | ||||
Deferred income taxes | (635 | ) | (4,148 | ) | ||||
Share-based compensation expense | 7,478 | 6,651 | ||||||
Share-based payment of business development and integration expenses | 411 | 1,182 | ||||||
Unrecognized tax benefits | 16 | (8 | ) | |||||
Net (gain) loss on disposition of assets | (116 | ) | 1,504 | |||||
Amortization of debt discount | 161 | 161 | ||||||
Amortization of debt issuance costs | 2,440 | 2,217 | ||||||
Integration-related property and equipment charges | - | 3,067 | ||||||
- | 404,900 | |||||||
Change in fair value of contingent consideration | 282 | (3,682 | ) | |||||
Changes in assets and liabilities (net of effects of business acquisitions): | ||||||||
Receivables | (14,685 | ) | 8,381 | |||||
Income tax receivable | 3,830 | (7,049 | ) | |||||
Other assets | (5,271 | ) | (5,443 | ) | ||||
Accounts payable and accrued liabilities | 15,985 | (13,628 | ) | |||||
Deferred revenue | 658 | (1,619 | ) | |||||
Accrued salaries and benefits | (1,483 | ) | (121 | ) | ||||
Income tax payable | (430 | ) | (549 | ) | ||||
Closure and post-closure obligations | (3,279 | ) | (1,744 | ) | ||||
Net cash provided by operating activities | 116,319 | 107,146 | ||||||
Cash Flows From Investing Activities: | ||||||||
Purchases of property and equipment | (68,666 | ) | (57,399 | ) | ||||
Proceeds from sale of property and equipment | 2,431 | 1,897 | ||||||
Proceeds from sale of restricted investments | 1,267 | 1,483 | ||||||
Purchases of restricted investments | (1,017 | ) | (1,615 | ) | ||||
Proceeds from sale of short-term investments | 2,142 | - | ||||||
Minority interest investment | (712 | ) | - | |||||
Insurance proceeds from damaged property and equipment | - | 1,305 | ||||||
Business acquisitions, net of cash acquired | - | (3,309 | ) | |||||
Net cash used in investing activities | (64,555 | ) | (57,638 | ) | ||||
Cash Flows From Financing Activities: | ||||||||
Proceeds from short-term borrowings | 61,326 | 72,353 | ||||||
Payments on short-term borrowings | (61,326 | ) | (72,353 | ) | ||||
Payments on long-term debt | (48,500 | ) | (74,500 | ) | ||||
Payment of equipment financing obligations | (5,616 | ) | (6,327 | ) | ||||
Payment of contingent consideration liabilities | (2,553 | ) | (2,517 | ) | ||||
Deferred financing costs paid | (957 | ) | (1,144 | ) | ||||
Repurchases of common stock | (465 | ) | (18,332 | ) | ||||
Proceeds from long-term debt | - | 90,000 | ||||||
Dividends paid | - | (5,667 | ) | |||||
Other | - | 28 | ||||||
Net cash used in financing activities | (58,091 | ) | (18,459 | ) | ||||
Effect of foreign exchange rate changes on cash | 277 | 1,915 | ||||||
(Decrease) increase in cash and cash equivalents and restricted cash | (6,050 | ) | 32,964 | |||||
Cash and cash equivalents and restricted cash at beginning of period | 75,104 | 42,140 | ||||||
Cash and cash equivalents and restricted cash at end of period | $ | 69,054 | $ | 75,104 | ||||
EXHIBIT A
Non-GAAP Results and Reconciliations
Adjusted EBITDA, adjusted earnings (loss) per diluted share, cash earnings per diluted share and adjusted free cash flow should not be considered in isolation or as an alternative to, or substitute for, net income, cash flows generated by operations, investing or financing activities, or other financial statement data presented in the consolidated financial statements as indicators of financial performance or liquidity. Adjusted EBITDA, adjusted earnings (loss) per diluted share and adjusted free cash flow have limitations as analytical tools and should not be considered in isolation or a substitute for analyzing our results as reported under GAAP. Some of the limitations are:
- Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;
- Adjusted EBITDA does not reflect our interest expense, or the requirements necessary to service interest or principal payments on our debt;
- Adjusted EBITDA does not reflect our income tax expenses or the cash requirements to pay our taxes;
- Adjusted EBITDA does not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments;
- Although depreciation and amortization charges are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and adjusted EBITDA does not reflect cash requirements for such replacements;
- Adjusted EBITDA does not reflect our business development and integration expenses, which may vary significantly quarter to quarter;
Adjusted EBITDA
The Company defines adjusted EBITDA as net income before interest expense, interest income, income tax expense/benefit, depreciation, amortization, share-based compensation, accretion of closure and post-closure liabilities, foreign currency gain/loss, non-cash impairment charges, business development and integration expenses and other income/expense.
The following reconciliation itemizes the differences between reported net income (loss) and adjusted EBITDA for the three months and year ended
(in thousands) | Three Months Ended | Year Ended | ||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Net income (loss) | $ | 3,564 | $ | (92,409 | ) | $ | 5,337 | $ | (389,359 | ) | ||||||
Income tax expense (benefit) | 3,417 | (4,784 | ) | 4,765 | (4,242 | ) | ||||||||||
Interest expense | 6,944 | 7,468 | 28,966 | 32,595 | ||||||||||||
Interest income | (269 | ) | (7 | ) | (1,417 | ) | (258 | ) | ||||||||
Foreign currency (gain) loss | (214 | ) | 979 | 171 | 1,134 | |||||||||||
Other income | (456 | ) | (406 | ) | (4,476 | ) | (788 | ) | ||||||||
- | 104,600 | - | 404,900 | |||||||||||||
Depreciation and amortization of plant and equipment | 16,704 | 11,730 | 70,799 | 66,561 | ||||||||||||
Amortization of intangible assets | 8,113 | 9,532 | 34,614 | 37,344 | ||||||||||||
Share-based compensation | 1,730 | 1,790 | 7,478 | 6,651 | ||||||||||||
Accretion and non-cash adjustments of closure & post-closure obligations | 1,792 | 188 | 5,363 | 4,000 | ||||||||||||
Business development and integration expenses | 746 | 4,114 | 3,274 | 11,621 | ||||||||||||
Adjusted EBITDA | $ | 42,071 | $ | 42,795 | $ | 154,874 | $ | 170,159 | ||||||||
Adjusted Earnings Per Diluted Share
The Company defines adjusted earnings per diluted share as net income (loss) adjusted for the after-tax impact of the gain on a minority interest investment, the after-tax impact of business development and integration costs, the after-tax impact of non-cash impairment charges, the after-tax impact of purchase accounting-related depreciation and amortization true-ups, and non-cash foreign currency translation gains or losses, divided by the number of diluted shares used in the earnings (loss) per diluted share calculation.
The gain on a minority interest investment excluded from the earnings (loss) per diluted share calculation represents an increase in the fair value of our investment based on a recent observable transaction in the equity of the entity. Impairment charges excluded from the earnings (loss) per diluted share calculation are related to the Company’s assessment of goodwill and intangible assets in 2020. Business development and integration costs excluded from the earnings (loss) per diluted share calculation relate to expenses incurred to evaluate businesses for potential acquisition or costs related to closing and integrating successfully acquired businesses and transaction expenses. Purchase accounting-related depreciation and amortization true-ups relate to the retrospective impact of adjustments to the fair values of property, plant and equipment and intangible assets related to the NRC merger. The foreign currency translation gains or losses excluded from the earnings (loss) per diluted share calculation are related to intercompany loans between our Canadian subsidiaries and the
We believe excluding the gain on minority interest investment, business development and integration costs, non-cash impairment charges, the after-tax impact of purchase accounting-related depreciation and amortization true-ups, and non-cash foreign currency translation gains or losses from the earnings (loss) per diluted share calculation provides meaningful information to investors regarding the operational and financial performance of the Company.
Cash Earnings Per Diluted Share
The Company defines cash earnings per diluted share as adjusted earnings per diluted share (see definition above) plus amortization of intangible assets, net of tax.
The following reconciliation itemizes the differences between reported net income (loss) and earnings (loss) per diluted share to adjusted net income and adjusted earnings per diluted share and cash earnings per diluted share for the three months and year ended
(in thousands, except per share data) | Three Months Ended | ||||||||||||||||||||||||
2021 | 2020 | ||||||||||||||||||||||||
Income (loss) before income taxes | Income tax (expense) benefit | Net income (loss) | per share | (Loss) income before income taxes | Income tax benefit (expense) | Net (loss) income | per share | ||||||||||||||||||
As Reported | $ | 6,981 | $ | (3,417 | ) | $ | 3,564 | $ | 0.11 | $ | (97,193 | ) | $ | 4,784 | $ | (92,409 | ) | $ | (2.97 | ) | |||||
Adjustments: | |||||||||||||||||||||||||
Plus: Business development and integration expenses | 746 | (205 | ) | 541 | 0.02 | 4,114 | (1,131 | ) | 2,983 | 0.09 | |||||||||||||||
Foreign currency (gain) loss | (214 | ) | 59 | (155 | ) | - | 979 | (269 | ) | 710 | 0.02 | ||||||||||||||
Less: Purchase accounting depreciation true-up related to prior periods | - | - | - | - | (5,734 | ) | 1,577 | (4,157 | ) | (0.13 | ) | ||||||||||||||
Plus: | - | - | - | - | 104,600 | (5,776 | ) | 98,824 | 3.18 | ||||||||||||||||
As Adjusted | $ | 7,513 | $ | (3,563 | ) | $ | 3,950 | $ | 0.13 | $ | 6,766 | $ | (815 | ) | $ | 5,951 | $ | 0.19 | |||||||
Plus: Amortization of intangible assets | $ | 8,113 | $ | (2,237 | ) | 5,876 | 0.18 | $ | 9,532 | $ | (2,619 | ) | 6,913 | 0.22 | |||||||||||
Cash earnings per diluted share | $ | 15,626 | $ | (5,800 | ) | $ | 9,826 | $ | 0.31 | $ | 16,298 | $ | (3,434 | ) | $ | 12,864 | $ | 0.41 | |||||||
Shares used in earnings (loss) per diluted share calculation | 31,359 | 31,078 | |||||||||||||||||||||||
(in thousands, except per share data) | Year Ended | ||||||||||||||||||||||||
2021 | 2020 | ||||||||||||||||||||||||
Income (loss) before income taxes | Income tax (expense) benefit | Net income (loss) | per share | (Loss) income before income taxes | Income tax benefit (expense) | Net (loss) income | per share | ||||||||||||||||||
As Reported | $ | 10,102 | $ | (4,765 | ) | $ | 5,337 | $ | 0.17 | $ | (393,601 | ) | $ | 4,242 | $ | (389,359 | ) | $ | (12.51 | ) | |||||
Adjustments: | |||||||||||||||||||||||||
Less: Gain on minority interest investment | (3,509 | ) | 965 | (2,544 | ) | (0.08 | ) | - | - | - | - | ||||||||||||||
Plus: Business development and integration expenses | 3,274 | (900 | ) | 2,374 | 0.08 | 11,621 | (3,196 | ) | 8,425 | 0.27 | |||||||||||||||
Foreign currency loss | 171 | (47 | ) | 124 | - | 1,134 | (312 | ) | 822 | 0.03 | |||||||||||||||
Plus: | - | - | - | - | 404,900 | (5,776 | ) | 399,124 | 12.82 | ||||||||||||||||
As Adjusted | $ | 10,038 | $ | (4,747 | ) | $ | 5,291 | $ | 0.17 | $ | 24,054 | $ | (5,042 | ) | $ | 19,012 | $ | 0.61 | |||||||
Plus: Amortization of intangible assets | $ | 34,614 | $ | (9,514 | ) | 25,100 | 0.80 | $ | 37,344 | $ | (10,275 | ) | 27,069 | 0.87 | |||||||||||
Cash earnings per diluted share | $ | 44,652 | $ | (14,261 | ) | $ | 30,391 | $ | 0.97 | $ | 61,398 | $ | (15,317 | ) | $ | 46,081 | $ | 1.48 | |||||||
Shares used in earnings (loss) per diluted share calculation | 31,373 | 31,126 | |||||||||||||||||||||||
Adjusted Free Cash Flow
The Company defines adjusted free cash flow as net cash provided by operating activities less purchases of property plant and equipment, plus business development and integration expenses, plus payments of deferred/contingent purchase consideration, plus purchases of property and equipment for the
The following reconciliation itemizes the differences between reported net cash from operating activities to adjusted free cash flow for the three months and year ended
Three Months Ended | Year Ended | ||||||||||||||
(in thousands) | 2021 | 2020 | 2021 | 2020 | |||||||||||
Adjusted Free Cash Flow Reconciliation | |||||||||||||||
Net cash provided by operating activities | $ | 39,278 | $ | 23,902 | $ | 116,319 | $ | 107,146 | |||||||
Less: Purchases of property and equipment | (23,319 | ) | (12,275 | ) | (68,666 | ) | (57,399 | ) | |||||||
Plus: Business development and integration expenses, net of tax | 541 | 2,983 | 2,374 | 8,425 | |||||||||||
Plus: Purchases of property and equipment for the | 17 | 1,469 | 1,653 | 4,284 | |||||||||||
Plus: Payment of deferred/contingent purchase consideration | - | 432 | 2,553 | 4,432 | |||||||||||
Plus: Proceeds from sale of property and equipment | - | 818 | 2,431 | 1,897 | |||||||||||
Adjusted Free Cash Flow | $ | 16,517 | $ | 17,329 | $ | 56,664 | $ | 68,785 | |||||||
Contact:
aziegler@darrowir.com www.usecology.com
Source:
2022 GlobeNewswire, Inc., source