Meridian Waste Solutions revenue increases by 46 percent in Q1

Meridian Waste Solutions Inc., a vertically integrated, non-hazardous solid waste services company in Atlanta, reported financial and operational results for Q1 2017.

Meridian Wastes revenue is generated primarily by collection services provided to residential customers, as well as commercial and temporary roll-off customers. With respect to its platform operation in St. Louis, the company is focused on building in and around this initial marketplace, focusing on bidding for additional municipal contracts in the St. Louis market, as well as pursuing acquisitions in the Midwest to drive this plan.

The recent acquisition of the CFS Group, Richmond, Virginia, demonstrates a key element of Meridian Waste’s strategy to create the vertically integrated infrastructure needed to expand its operations, as the company was able to acquire underused assets such as a landfill and integrate these assets into the company's collection and transfer network to improve the efficiencies and margins of the company's operations in the market. Meridian Waste continues to evaluate many potential acquisitions both within its existing markets and new geographic areas.

Chairman and CEO Jeff Cosman says, "It was a very busy and productive start to 2017, as we solidified our platform in the St. Louis market by winning new business, entered a new market with potential based on vertical integration in the Richmond, Virginia, area with the CFS Group acquisition, and advanced our capital markets strategy by uplisting to NASDAQ. As we continue to execute within our two existing markets, there is plenty of opportunity we are evaluating to further expand nationally. Additionally, we are excited about growth opportunities we have identified with both Meridian Innovations and Meridian Materials."

For Q1 2017, revenues were $ 10.9 million, a 46 percent increase from $7.5 million for the three months ended March 31, 2016. Organic revenue growth of 9.2 percent was driven by additional customers and price increases.

Unaudited pro forma revenue for Q1 2017, as if the acquisition of the CFS Group took place on Jan. 1, 2016, was $13.4 million, which represents 6.9 percent organic growth as compared to the three months ended March 31, 2016.

As revenues continue to grow in existing markets, Meridian Waste plans to increase the rate of this growth by increasing its presence in the commercial and roll-off business. Management also expects continued growth through additional mergers and acquisitions.

Gross profit improved by $0.9 million to $3.9 million in Q1 2017 as compared to a $3 million gross profit in the three months ended March 31, 2016. The CFS Group’s operating expenses are currently significantly higher than that of the other operating subsidiaries. For Q1 2017, CFS's operating expenses were approximately 74 percent of revenue, while the Midwest segments operating expenses were approximately 61 percent of revenue.

Management believes there is an opportunity to improve efficiencies of operations at CFS, and would expect its operating margins to improve over time. There are also synergistic opportunities, such as creating density in some of its routes and internalization of its waste, which are also in process.

For Q1 2017, adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) was $3.2 million and includes a full quarter pro forma effect of the CFS acquisition. Net loss for Q1 2017 decreased by $3.4 million to $3 million or $0.58 per share, as compared to $6.4 million or $5.93 per share in the three months ended March 31, 2016.