Waste Connections Reports Third Quarter 2005 Results
- Reports net income and earnings per share of $24.5 million and $0.51, respectively
- Reports YTD free cash flow of $80.8 million, or 15.1% of revenue
- Completes approximately $50 million YTD of acquired annualized revenue
PRNewswire-FirstCall
FOLSOM, Calif.

Waste Connections, Inc. today announced third quarter earnings of $0.51 per share on a diluted basis of 48.1 million shares, an increase of 10.9% over diluted earnings per share from continuing operations of $0.46 in the year ago period. Revenue for the third quarter of 2005 was $188.7 million, a 17.1% increase over revenue of $161.2 million in the third quarter of 2004. Operating income for the third quarter of 2005 was $46.5 million, a 7.9% increase over operating income of $43.1 million in the third quarter of 2004. Net income in the quarter was $24.5 million, a 7.8% increase over income from continuing operations of $22.7 million in the year ago period.

For the nine months ended September 30, 2005, revenue was $533.5 million, a 15.5% increase over revenue of $462.0 million in the year ago period. Operating income for the nine months ended September 30, 2005, was $128.8 million, an 8.2% increase over operating income of $119.0 million for the same period in 2004. Income from continuing operations for the nine months ended September 30, 2005, was $65.8 million, a 12.7% increase over income from continuing operations of $58.4 million in the prior year period. Diluted earnings per share from continuing operations for the nine months ended September 30, 2005, was $1.36, an increase of 12.4% over diluted earnings per share from continuing operations of $1.21 in the year ago period. The year ago period included $1.5 million pre-tax expense ($1.1 million net of taxes) for early retirement of convertible notes.

"Once again this year as in previous years, the third quarter provided many of the building blocks for the following year's growth. Internal growth continues to meet our expectations, with price increases and surcharges helping us offset a significant portion of recent cost pressures. We plan to implement additional price increases and surcharges, and to focus on improving organic volume growth, next year in an effort to address expected continuing cost pressures," said Ronald J. Mittelstaedt, Chairman and Chief Executive Officer. "We expect that increased acquisition activity and expansion of our landfill network also will benefit us in 2006. Already this year, we have closed acquisitions in nine states with annualized revenue totaling approximately $50 million, a majority of which is in what we believe are the more attractive markets in the Western U.S, and we expect the amount of acquired annualized revenue to increase in 2006. In addition, of the three new landfills currently under construction, two are expected to open in the fourth quarter, and the third site is expected to open in early 2006."

Mr. Mittelstaedt continued, "Our third quarter results were negatively impacted by costs associated with labor negotiations in San Jose, higher than expected fuel and related cost items, and lower than expected volumes from certain special waste projects. The results also reflect the contribution from lower margin acquisitions completed in the quarter."

Waste Connections will be hosting a conference call related to third quarter earnings and fourth quarter outlook on October 26th at 8:30 A.M. Eastern Time. The call will be broadcast live over the Internet at www.streetevents.com and through a link on our web site at www.wasteconnections.com. A playback of the call will be available at both of these sites.

Waste Connections, Inc. is an integrated solid waste services company that provides solid waste collection, transfer, disposal and recycling services in mostly secondary markets in the Western and Southern U.S. The Company serves more than one million residential, commercial and industrial customers from a network of operations in 23 states. The Company also provides intermodal services for the movement of containers in the Pacific Northwest. Waste Connections, Inc. was founded in September 1997 and is headquartered in Folsom, California.

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 web site or through contacting us directly at (916) 608-8200.

For non-GAAP measures, see accompanying Non-GAAP Reconciliation Schedule.

In the second quarter of 2005, Waste Connections classified as discontinued operations the results of certain operations in Utah and California that were exited during the quarter. In 2004, Waste Connections classified as discontinued operations the results of its Georgia operations and certain operations in Eastern Washington that were sold. Results for 2004 and the nine months ended September 30, 2005 have been reclassified to present the results for these operations as discontinued operations.

Certain statements contained in this press release are forward-looking in nature. These statements can be identified by the use of forward-looking terminology such as "believes," "expects," "may," "will," "should," or "anticipates" or the negative thereof or comparable terminology, or by discussions of strategy. Waste Connections' business and operations are subject to a variety of risks and uncertainties and, consequently, actual results may differ materially from those projected by any forward-looking statements. Factors that could cause actual results to differ from those projected include, but are not limited to, the following: (1) Waste Connections may be unable to compete effectively with larger and better capitalized companies and governmental service providers, which may result in reduced volume and revenues and lower profits; (2) the expiration of our fuel purchase contract and increased fuel prices may adversely affect Waste Connections' business and earnings; (3) increases in Waste Connections' insurance costs and the amount that it self-insures for various risks could reduce its operating margins and reported earnings; (4) increases in labor and disposal and related transportation costs could reduce Waste Connections' operating margins; (5) Waste Connections may lose contracts through competitive bidding, early termination or governmental action, which would cause its volumes and revenues to decline; (6) competition for acquisition candidates, consolidation within the waste industry and economic and market conditions may limit Waste Connections' ability to grow through acquisitions; (7) Waste Connections' intermodal business could be adversely affected by steamship lines diverting business to ports other than those it services, by heightened security measures or actual or threatened terrorist attacks, or by other reductions or deteriorations in rail service, which could cause its intermodal revenues to decline; (8) Waste Connections' growth and future financial performance depend significantly on its ability to integrate acquired businesses into its organization and operations; (9) Waste Connections' acquisitions may not be successful, resulting in changes in strategy, operating losses or a loss on sale of the business acquired; (10) Waste Connections' business and earnings may be adversely affected by its inability to successfully implement additional price increases and surcharges to meet continuing cost pressures; (11) the geographic concentration of Waste Connections' business makes its pricing growth and operating results vulnerable to economic and seasonal factors affecting the regions in which it operates; (12) Waste Connections' volume growth may be limited by the inability to renew landfill operating permits, obtain new landfills and expand existing ones; (13) extensive and evolving environmental laws and regulations may restrict Waste Connections' operations and growth and increase its costs; and (14) Waste Connections may be subject in the normal course of business to judicial and administrative proceedings that could interrupt its operations, require expensive remediation and create negative publicity. These risks and uncertainties, as well as others, are discussed in greater detail in Waste Connections' filings with the Securities and Exchange Commission, including its most recent Annual Report on Form 10-K/A. There may be additional risks of which Waste Connections is not presently aware or that it currently believes are immaterial which could have an adverse impact on its business. Waste Connections makes no commitment to revise or update any forward-looking statements in order to reflect events or circumstances after the date any such statement is made.

                         WASTE CONNECTIONS, INC.
                    CONSOLIDATED STATEMENTS OF INCOME
         THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2005
                               (Unaudited)
            (in thousands, except share and per share amounts)

                                   Three months ended   Nine months ended
                                     September 30,         September 30,
                                    2004       2005       2004      2005

  Revenues                        $161,175   $188,745   $462,048   $533,454
  Operating expenses:
    Cost of operations              88,682    108,049    257,693    305,815
    Selling, general and
     administrative                 15,628     17,686     45,519     51,924
    Depreciation and amortization   13,931     16,728     39,985     47,278
    Gain on disposal of assets        (125)      (198)      (156)      (332)
  Operating income                  43,059     46,480    119,007    128,769

  Interest expense                  (4,928)    (6,033)   (16,925)   (16,543)
  Minority interests                (3,309)    (3,158)    (8,995)    (9,272)
  Other income (expense), net            3         55     (1,400)       226
  Income from continuing
   operations before income tax     34,825     37,344     91,687    103,180

  Income tax provision             (12,130)   (12,869)   (33,300)   (37,360)
  Income from continuing
   operations                       22,695     24,475     58,387     65,820
  Loss on discontinued operations,
   net of tax                         (244)        --       (563)      (579)

  Net income                       $22,451    $24,475    $57,824    $65,241

  Basic earnings per common share:
    Continuing operations            $0.48      $0.53      $1.26      $1.40
    Discontinued operations          (0.01)        --      (0.01)     (0.01)
    Net income per common share      $0.47      $0.53      $1.25      $1.39

  Diluted earnings per common
   share(a):
    Continuing operations            $0.46      $0.51      $1.21      $1.36
    Discontinued operations             --         --      (0.01)     (0.02)
    Net income per common share      $0.46      $0.51      $1.20      $1.34

  Shares used in the per share
   calculations:
     Basic                      47,725,447 46,523,711 46,152,184 46,904,412
     Diluted                    48,966,181 48,122,605 49,538,370 48,511,858

  (a)  Diluted earnings per share assumes conversion of the 5.5% Convertible
       Subordinated Notes due 2006 prior to their redemption on April 15,
       2004.  The interest expense related to these notes, net of tax
       effects, for the three and nine months ended September 30, 2004 was
       $0 and $1,707, respectively.


                         WASTE CONNECTIONS, INC.
                  CONDENSED CONSOLIDATED BALANCE SHEETS
                               (Unaudited)
            (in thousands, except share and per share amounts)



                                                December 31,  September  30,
                                                    2004           2005
  ASSETS
  Current assets:
    Cash and equivalents                            $3,610         $6,734
    Accounts receivable, less allowance for
     doubtful accounts of $2,414 and $2,406 at
     December 31, 2004 and September 30, 2005,
     respectively                                   80,864         93,305
    Deferred tax assets                                  -          4,296
    Prepaid expenses and other current assets       17,008         15,867
      Total current assets                         101,482        120,202

  Property and equipment, net                      640,730        676,205
  Goodwill                                         642,773        720,033
  Intangible assets, net                            68,741         86,895
  Restricted cash                                   14,159         13,320
  Other assets, net                                 23,598         30,582
                                                $1,491,483     $1,647,237

  LIABILITIES AND STOCKHOLDERS' EQUITY
  Current liabilities:
    Accounts payable                               $34,280        $46,837
    Book overdraft                                   8,661          5,147
    Accrued liabilities                             38,780         49,001
    Deferred revenue                                24,155         29,155
    Current portion of long-term debt and notes
     payable                                         9,266          9,791
      Total current liabilities                    115,142        139,931

  Long-term debt and notes payable                 489,343        576,132
  Other long-term liabilities                        9,020         19,719
  Deferred tax liabilities                         146,035        170,429
      Total liabilities                            759,540        906,211

  Commitments and contingencies
  Minority interests                                24,421         25,166

  Stockholders' equity:
  Preferred stock: $0.01 par value; 7,500,000
   shares authorized; none issued and
   outstanding                                          --             --
  Common stock: $0.01 par value; 100,000,000
   shares authorized; 47,605,791 and 46,317,813
   shares issued and outstanding at December 31,
   2004 and September 30, 2005, respectively           476            463
  Additional paid-in capital                       444,404        385,953
  Deferred stock compensation                       (1,598)        (2,302)
  Retained earnings                                261,365        326,606
  Accumulated other comprehensive income             2,875          5,140
    Total stockholders' equity                     707,522        715,860
                                                $1,491,483     $1,647,237

                         WASTE CONNECTIONS, INC.
             CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
              NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2005
                               (Unaudited)
                          (Dollars in thousands)

                                                        Nine months ended
                                                          September 30,
                                                        2004         2005


  Cash flows from operating activities:
  Net income                                          $57,824      $65,241
  Adjustments to reconcile net income to
   net cash provided by operating activities:
    Loss (gain) on disposal of assets                     119         (529)
    Depreciation                                       39,979       45,450
    Amortization of intangibles                         1,867        2,077
    Deferred income taxes, net of acquisitions         15,420       (4,814)
    Minority interests                                  8,995        9,272
    Amortization of debt issuance costs                 1,740        1,430
    Stock-based compensation                              736          940
    Interest income on restricted cash                   (206)        (272)
    Closure and post-closure accretion                    308          509
    Tax benefit on the exercise of stock options        6,099        6,987
    Net change in operating assets and liabilities,
     net of acquisitions                                5,155       23,505
  Net cash provided by operating activities           138,036      149,796

  Cash flows from investing activities:
    Payments for acquisitions, net of cash acquired   (13,737)     (73,548)
    Capital expenditures for property and equipment   (56,201)     (61,418)
    Proceeds from disposal of assets                      718        4,420
    Net change in other assets                          4,174          499
  Net cash used in investing activities               (65,046)    (130,047)

  Cash flows from financing activities:
    Proceeds from long-term debt                      127,000      195,098
    Principal payments on notes payable and
     long-term debt                                  (167,962)    (132,939)
    Change in book overdraft                           (1,555)      (3,514)
    Proceeds from option and warrant exercises         29,760       25,216
    Distributions to minority interest holders         (8,869)      (8,526)
    Payments for repurchase of common stock           (51,206)     (91,917)
    Debt issuance costs                                  (457)         (43)
  Net cash used in financing activities               (73,289)     (16,625)

  Net increase (decrease) in cash and equivalents        (299)       3,124
  Cash and equivalents at beginning of period           5,276        3,610
  Cash and equivalents at end of period                $4,977       $6,734


                          ADDITIONAL STATISTICS
                  THREE MONTHS ENDED SEPTEMBER 30, 2005
                          (Dollars in thousands)

Internal Growth: The following table reflects revenue growth for operations owned for at least 12 months:

       Price                2.9%
       Volume               1.7%
       Recycling            0.2%
       Total                4.8%


  Uneliminated Revenue Breakdown:

       Collection                 $134,634            62.7%
       Disposal and Transfer        60,182            28.0%
       Intermodal                   10,394             4.8%
       Recycling and Other           9,731             4.5%
       Total                      $214,941           100.0%

       Inter-company elimination   $26,196


  Days Sales Outstanding:  44

  Internalization:  69%

  Other Cash Flow Items:
   Cash Interest Paid:  $7,032
   Cash Taxes Paid:     $6,763

  Debt to Capitalization:  45.0%
   Total Debt divided by Total Debt plus Total Stockholders' Equity:
   ($576,132 + $9,791) / ($576,132 + $9,791 + $715,860) = 45.0%

  Share Information for the three months ended September 30, 2005:

       Basic shares outstanding                         46,523,711
       Dilutive effect of options and warrants           1,056,248
       Dilutive effect of convertible notes                518,949
       Dilutive effect of restricted stock                  23,697
       Diluted shares outstanding                       48,122,605

       Shares repurchased                                  581,700


                     NON-GAAP RECONCILIATION SCHEDULE
              THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2005
                              (in thousands)

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. Waste Connections defines free cash flow as net cash provided by operating activities, plus cash proceeds from disposal of assets, plus or minus change in book overdraft, less capital expenditures and distributions to minority interest holders. This measure is not a substitute for, and should be used in conjunction with, GAAP financial measures. Management uses free cash flow as one of the principal measures to evaluate and monitor the ongoing financial performance of our operations. Other companies may calculate free cash flow differently.

  Free cash flow reconciliation:

                                      Three Months Ended  Nine Months Ended
                                      September 30, 2005  September 30, 2005

  Net cash provided by operating
   activities                              $52,312            $149,796
  Change in book overdraft                   3,229              (3,514)
  Plus: Cash proceeds from disposal
   of assets                                   486               4,420
  Less: Capital expenditures for
   property and equipment                  (27,147)            (61,418)
  Less: Distributions to minority
   interest holders                         (3,185)             (8,526)
  Free cash flow                           $25,695             $80,758

  Free cash flow as % of revenues             13.6%               15.1%

SOURCE: Waste Connections, Inc.

CONTACT: Worthing Jackman of Waste Connections, Inc., +1-916-608-8266,
or worthingj@wasteconnections.com