News Releases

- Revenue of $727.6 million, exceeding outlook

- Reports 5.0% solid waste price + volume growth

- Net income of $27.5 million, or $0.20 per share

- Adjusted net income* of $93.2 million, or $0.66 per share

- Adjusted EBITDA* of $233.6 million, or 32.1% of revenue, exceeding outlook

- YTD net cash provided by operating activities of $259.6 million

- YTD adjusted free cash flow* of $234.4 million, or 18.9% of revenue

- Integration of Progressive Waste on track; contribution ahead of expectations

- Authorizes share repurchase program

TORONTO, Aug. 3, 2016 /PRNewswire/ -- Waste Connections, Inc. (TSX/NYSE: WCN) ("Waste Connections" or the "Company") today announced its results for the second quarter of 2016.  Revenue in the second quarter, which included $174.0 million from the Progressive Waste acquisition, was $727.6 million, as compared to revenue of $531.3 million in the year ago period.  Operating income, which included $73.2 million of items primarily related to the Progressive Waste combination completed in the period, was $63.5 million, as compared to $110.0 million in the second quarter of 2015. 

Net income attributable to Waste Connections in the quarter was $27.5 million, or $0.20 per share on a diluted basis of 140.6 million shares.  In the year ago period, the Company reported net income attributable to Waste Connections of $57.4 million, or $0.46 per share on a diluted basis of 124.4 million shares.

Adjusted net income attributable to Waste Connections* in the quarter was $93.2 million, or $0.66 per share, versus $61.6 million, or $0.50 per share, in the prior year period.  Adjusted EBITDA* in the current year period was $233.6 million, as compared to adjusted EBITDA of $177.7 million in the prior year period.  Adjusted net income, adjusted net income per diluted share and adjusted EBITDA, all non-GAAP measures, primarily exclude the impact of acquisition-related items, as shown in the detailed reconciliation in the attached table.

"Better than expected solid waste volume growth and contribution from the recent combination with Progressive Waste enabled us to once again exceed our outlook for the period.  Solid waste margins, excluding the impact of the acquisitions completed since the prior year period, expanded approximately 110 basis points year-over-year.  We believe this performance, together with pricing and operating improvement plans we've implemented in Progressive Waste operations, has already positioned our financial run-rate at or above the upper end of our previous outlook for the first year following the combination," said Ronald J. Mittelstaedt, Chief Executive Officer and Chairman. "We had underestimated the opportunity for improvement within Progressive Waste's operations and are encouraged by the organizational momentum to exceed original expectations as we look ahead."

Mr. Mittelstaedt added, "Acquisition dialogue remains robust, while continued strength in free cash flow provides the ability to fund both additional growth and return of capital to shareholders.  To that end and as also announced today, our board authorized a share repurchase program for up to 5% of our outstanding shares over the next 12 months."

For the six months ended June 30, 2016 revenue was $1.24 billion, as compared to revenue of $1.04 billion in the year ago period.  Operating income, which included $82.0 million of items related to the Progressive Waste combination completed on June 1, 2016, was $154.5 million compared to $211.9 million for the same period in 2015.

* A non-GAAP measure; see accompanying Non-GAAP Reconciliation Schedule

Net income attributable to Waste Connections for the six months ended June 30, 2016, was $72.3 million, or $0.55 per share on a diluted basis of 132.0 million shares.  In the year ago period, the Company reported net income attributable to Waste Connections of $109.2 million, or $0.88 per share on a diluted basis of 124.4 million shares. 

Adjusted net income attributable to Waste Connections* for the six months ended June 30, 2016, was $148.4 million, or $1.12 per share, compared to $118.2 million, or $0.95 per share, in the year ago period. Adjusted EBITDA* for the six months ended June 30, 2016, was $403.3 million, as compared to $346.0 million in the prior year period. 

* A non-GAAP measure; see accompanying Non-GAAP Reconciliation Schedule

Presentation of Financials

The combination of Waste Connections US, Inc. (f/k/a Waste Connections, Inc., "Old Waste Connections") and the Company (f/k/a Progressive Waste Solutions Ltd.) was accounted for as a reverse merger using the acquisition method of accounting. The financial statements presented herein are the historical financial statements of Old Waste Connections with the inclusion on June 1, 2016 of the fair value of the assets and liabilities acquired from Progressive Waste and the inclusion of the results of operations from the acquired Progressive Waste operations commencing on June 1, 2016.  The term "Progressive Waste" is used herein in the context of references to Progressive Waste Solutions Ltd. prior to the completion of the Progressive Waste acquisition on June 1, 2016.

About Waste Connections

Waste Connections is an integrated solid waste services company that provides waste collection, transfer, disposal and recycling services in mostly exclusive and secondary markets in the United States and Canada.  Through its R360 Environmental Solutions subsidiary, Waste Connections is also a leading provider of non-hazardous oilfield waste treatment, recovery and disposal services in several of the most active natural resource producing areas in the United States, including the Permian, Bakken and Eagle Ford Basins.  Waste Connections serves more than six million residential, commercial, industrial, and exploration and production customers in 40 states and the District of Columbia in the U.S., and six provinces in Canada.  The Company also provides intermodal services for the movement of cargo and solid waste containers in the Pacific Northwest. 

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 website or through contacting us directly at (905) 532-7510.  Investors can also obtain these materials and other documents filed with the Securities and Exchange Commission (SEC) and the Canadian securities regulators free of charge at the SEC's website, www.sec.gov and at the System for Electronic Document Analysis and Retrieval (SEDAR) maintained by the Canadian Securities Administrators at www.sedar.com.  

Safe Harbor and Forward-Looking Information

This press release contains forward-looking statements (which include "forward-looking information" as that term is defined in applicable securities laws in Canada) within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995 (PSLRA). 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 and speak only as of the date hereof. 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 press release are made pursuant 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 press release include, but are not limited to, statements about potential operating trends and acquisition activity, future financial performance and repurchases of common shares of the Company. Important factors that could cause actual results to differ, possibly materially, from those indicated by the forward-looking statements include, without limitation, the following:  the possibility that any of the anticipated benefits of the combination of the Company and Waste Connections US, Inc. (f/k/a Waste Connections, Inc.) will not be realized; the ability of the combined company to successfully achieve business objectives, including integrating the two companies or the effects of unexpected costs, liabilities or delays; the potential benefits and synergies of the transaction; and expectations for other economic, business and/or competitive factors.  In addition, you should carefully consider the risks and uncertainties and other factors that may affect future results of the combined company that are disclosed in filings that have been made by the Company (including, under its former name, Progressive Waste Solutions Ltd.) and by Waste Connections US, Inc. (including, under its former name, Waste Connections, Inc.) with the 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 press release.  Waste Connections undertakes no obligation to update the forward-looking statements set forth in this press release, whether as a result of new information, future events, or otherwise, unless otherwise required by applicable securities laws.

– financial tables attached –

ADDITIONAL STATISTICS
(Dollars in thousands)

Solid Waste Internal Growth:  The following table reflects a breakdown of the components of our solid waste internal growth for the three months ended June 30, 2016:

Revenue Breakdown: The following table reflects a breakdown of our revenue for the three month periods ending June 30, 2015 and 2016:

Contribution from Acquisitions: The following table reflects revenues from acquisitions, net of divestitures, for the three month periods ending June 30, 2015 and 2016:

ADDITIONAL STATISTICS (continued)

Other Cash Flow Items: The following table reflects cash interest and cash taxes for the three and six month periods ending June 30, 2015 and 2016:

Debt to Book Capitalization as of June 30, 2016:  40%

Internalization for the three months ended June 30, 2016:  54%

Days Sales Outstanding for the three months ended June 30, 2016 pro forma for the Progressive Waste acquisition: 43 (31 net of deferred revenue)

Share Information for the three months ended June 30, 2016:

NON-GAAP RECONCILIATION SCHEDULE
(in thousands)

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 the Company's operations.  Waste Connections defines adjusted EBITDA as net income, plus income tax provision, plus interest expense, plus depreciation and amortization expense, plus closure and post-closure accretion expense, plus or minus any loss or gain on other operating items, plus other expense, less other income, plus foreign currency transaction loss, less foreign currency transaction gain.  The Company further adjusts 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. 

NON-GAAP RECONCILIATION SCHEDULE (continued)
(in thousands)

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 valuation and liquidity measure in the solid waste industry.  Management uses adjusted free cash flow as one of the principal measures to evaluate and monitor the ongoing financial performance of the Company's operations.  Waste Connections defines adjusted free cash flow as net cash provided by operating activities, plus proceeds from disposal of assets, plus or minus change in book overdraft, plus excess tax benefit associated with equity-based compensation, less capital expenditures for property and equipment and distributions to noncontrolling interests.  Waste Connections further adjusts this calculation to exclude the effects of items management believes impact the ability to assess the operating performance of its business.  This measure is not a substitute for, and should be used in conjunction with, GAAP liquidity or financial measures.  Other companies may calculate adjusted free cash flow differently. 

NON-GAAP RECONCILIATION SCHEDULE (continued)
(in thousands, except per share amounts)

Reconciliation of Net Income to Adjusted Net Income and Adjusted Net Income per Diluted Share:

Adjusted net income attributable to Waste Connections and adjusted net income per diluted share attributable to Waste Connections, both non-GAAP financial measures, are provided supplementally because they are widely used by investors as a valuation measure in the solid waste industry.  Management uses adjusted net income attributable to Waste Connections and adjusted net income per diluted share attributable to Waste Connections as one of the principal measures to evaluate and monitor the ongoing financial performance of the Company's operations.  Waste Connections provides adjusted net income attributable to Waste Connections to exclude the effects of items management believes impact the comparability of operating results between periods.  Adjusted net income attributable to Waste Connections has limitations due to the fact that it excludes items that have an impact on the Company's financial condition and results of operations.  Adjusted net income attributable to Waste Connections and adjusted net income per diluted share attributable to Waste Connections are not a substitute for, and should be used in conjunction with, GAAP financial measures.  Other companies may calculate adjusted net income attributable to Waste Connections and adjusted net income per diluted share attributable to Waste Connections differently. 

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SOURCE Waste Connections, Inc.