TORONTO, Ontario, Canada (July 25, 2014) — Progressive Waste Solutions Ltd. (the "Company") (NYSE:BIN)(TSX:BIN) reported financial results for the three and six months ended June 30, 2014.
Second quarter highlights
- Consolidated revenues of $513.5 million in the second quarter, a decline of 0.6% from the comparative period. Excluding a negative impact of $13.0 million in foreign currency translation, consolidated revenues increased 1.9%
- Consolidated organic growth improvement of 2.0%, driven by higher collection and disposal pricing
- Consolidated volume decline of 0.2%
- Adjusted EBITDA of $131.9 million and adjusted operating income or adjusted operating EBIT of $79.8 million
- Reported and adjusted net income per share of $0.36 and $0.41, respectively. Reported and adjusted net income includes a net gain on sale of capital and landfill assets of $20 million
- Free cash flow of $56.4 million. Excluding internal infrastructure investments, free cash flow of $60.9 million, representing 11.9% of revenue
- Returned $10.9 million to shareholders through stock repurchases
- Board of Directors declares increase of 6.7% to quarterly cash dividend effective September 30, 2014
(All amounts are in United States ("U.S.") dollars, unless otherwise stated)
"We performed well on many measures in the second quarter and we are making progress on several components of the strategic plan we initiated to improve EBITDA margins and free cash flow through operational excellence," said Joseph Quarin, President and Chief Executive Officer, Progressive Waste Solutions Ltd. "In the quarter, consolidated revenues increased 1.9%, excluding the impact of foreign currency translation, with consolidated organic revenue growth of 2.0% led by higher pricing in our collection and disposal service lines. Consolidated volumes declined 0.2% from the second quarter a year ago, but represent the third sequential quarter of volume improvement and are on track to turn positive in the second half of the year. Adjusted EBITDA increased 0.6%, excluding the impact of foreign currency translation, driven by revenue gains and lower SG&A costs, but offset by higher operating expenses as a percentage of revenue in the period."
"Operating expenses in the quarter reflect higher fuel costs as well as higher repairs and maintenance costs, related to the implementation of our strategic plan. Our guiding principle is to make the best long-term cash decisions for the business and these are short-term operating cost variances as we standardize best practices throughout our fleet and ensure the optimal allocation of capital in our field operations. In the second quarter we advanced several programs, such as fleet automation and conversion to compressed natural gas with the receipt of new trucks, that will reduce operating expenses in the third and fourth quarters and meaningfully expand EBITDA margins in the second half of 2014 and beyond. With our strategic plan taking hold, we are also well-positioned to reduce our replacement capital expenditures next year."
Mr. Quarin added, "We remain committed to creating long-term shareholder value through a combination of operational excellence and disciplined capital allocation. We returned $10.9 million to shareholders in the second quarter through our share repurchase program and we are pleased to announce an increase of 6.7% to our quarterly cash dividend, raising it to $0.64 Canadian per share annually."
Three months ended June 30, 2014
Reported revenues decreased ($3.3) million or (0.6)% from $516.8 million in the second quarter of 2013 to $513.5 million in the second quarter of 2014. Expressed on a reportable basis and assuming a foreign currency exchange ("FX") rate of parity between the Canadian and U.S. dollar ("FX parity"), revenues increased 1.9% due in large part to a 2.0% increase attributable to higher overall core pricing partially offset by slightly lower volumes.
Operating income was $78.1 million in the second quarter of 2014 versus $64.6 million in the second quarter of 2013. Net income was $40.9 million versus $32.3 million in the second quarters of 2014 and 2013, respectively.
Adjusted EBITDA was $131.9 million in the second quarter of 2014 versus $134.9 million posted in the same quarter a year ago. Adjusted operating EBIT was $79.8 million or 19.0% higher in the quarter compared to $67.0 million in the same period last year. Adjusted net income was $47.2 million, or $0.41 per diluted share, compared to $35.3 million, or $0.31 per diluted share in the comparative period.
Six months ended June 30, 2014
For the six months ended June 30, 2014, reported revenues decreased ($20.1) million or (2.0)% from $1,003.4 million in 2013 to $983.3 million. Expressed on a reportable basis and at FX parity, revenues increased 0.9% on a comparative basis. The increase is due in large part to a 2.0% increase attributable to higher overall core pricing and recycled commodity pricing partially offset by a decline in volumes.
For the six months ended June 30, operating income was $119.4 million in 2014 versus $123.8 million in 2013. Net income was $66.8 million versus $61.6 million for the six months ended June 30, 2014 and 2013, respectively.
For the six months ended June 30, adjusted EBITDA was $244.7 million or (7.3)% lower in 2014 versus $263.9 million in 2013. Adjusted operating EBIT was $122.4 million compared to the $125.4 million recorded last year. Adjusted net income was $72.0 million, or $0.63 per diluted share, compared to $62.4 million, or $0.54 per diluted share in the same period last year.
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About Progressive Waste Solutions Ltd.
As one of North America's largest full-service waste management companies, we provide non-hazardous solid waste collection, recycling and disposal services to commercial, industrial, municipal and residential customers in 13 U.S. states (including McKinney, Texas) and the District of Columbia and six Canadian provinces. We serve our customers with vertically integrated collection and disposal assets. Progressive Waste Solutions Ltd.'s shares are listed on the New York and Toronto Stock Exchanges under the symbol BIN. To find out more about Progressive Waste Solutions Ltd., visit progressivewaste.com.