Progressive Waste Solutions reports financial results for Q4 and year

Toronto-based Progressive Waste Solutions Ltd. reported its financial results for the three months and year ended Dec. 31, 2015.

For the three months ended Dec. 31, 2015, reported revenue decreased $20.7 million, or 4.1 percent, from $504.6 million in the fourth quarter of 2014 to $483.9 million in the fourth quarter of 2015. Revenue increased 1.6 percent largely because of 1.4 percent increase in overall pricing and higher volumes of 2.3 percent, partially offset by divestitures, net of acquisitions, lower fuel surcharges and recycling and other pricing, the company reports.

Operating income was $65.4 million in the fourth quarter of 2015 versus $56.2 million in the fourth quarter of 2014. Net income was $45.7 million versus $18.9 million in the fourth quarters of 2015 and 2014, respectively.

Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was $125.6 million in the fourth quarter of 2015 versus $138.8 million posted in the same quarter a year ago. Adjusted operating EBIT (earnings before interest and taxes) was $67 million, or 7.6 percent lower in the quarter compared with $72.5 million in the same period last year. Adjusted net income was $39.9 million, or 36 cents per diluted share, compared with $39.9 million, or 35 cents per diluted share, in the comparative period.

"Our performance in the fourth quarter is in line with the outlook that we provided on Oct. 30, 2015, and reflects continued organic revenue growth in the U.S. and Canada," says Dan Pio, chief executive officer. "In the quarter, we completed two acquisitions including a platform acquisition in South Carolina, improved operating margins on a sequential basis in our West region, delivered continued strong results in our North region and undertook the startup of several municipal waste collection contracts in our East region. We note that operating expenses in our East region in the quarter include a charge related to a discontinued property development and, as previously announced, costs associated with our municipal contract startups."

Pio continued, "We expect these municipal contracts combined with our recent acquisitions to contribute to a solid revenue and EBITDA performance in the first quarter of 2016. We also expect to benefit from the mild winter weather, which is resulting in unseasonably strong disposal volumes at our landfills, as well as lower fuel costs which will more than offset the impact of lower recycled commodity prices."

For the year ended Dec. 31, 2015, reported revenue decreased $83.4 million, or 4.2 percent, from $2,009 million in 2014 to $1,925.6 million in 2015. Expressed on a reportable basis and at FX parity, revenue increased 1.1 percent on a comparative basis. The increase is largely because of a 1.7 percent increase in overall pricing and higher volumes, partially offset by declines in fuel surcharges, divestitures, net of acquisitions, and recycling and other pricing, notes the company.

For the year ended Dec. 31, operating income was $222.7 million in 2015 versus $241.1 million in 2014. Net income was $123.9 million versus $126.5 million for the years ended Dec. 31, 2015, and 2014, respectively.

For the year ended Dec. 31, adjusted EBITDA was $479.9 million, or 8.3 percent lower in 2015 versus the $523.4 million posted in 2014. Adjusted operating EBIT was $232.8 million compared to the $263.2 million recorded last year. Adjusted net income was $137.9 million, or $1.25 per diluted share, compared with $153.1 million, or $1.33 per diluted share, last year.

"We are well-positioned to enter into the previously announced business combination with Waste Connections," Pio added. "As noted in the Jan. 19 announcement, we are looking forward to the value that will be created with Waste Connections through an expanded operational footprint, diversified revenue streams and their proven corporate culture, safety focus and operational excellence. I am confident that the business combination will secure a strong future for our customers, employees and shareholders."

On Jan. 18, 2016, the company entered into a definitive agreement and plan of merger with and among Waste Connections Inc. and Water Merger Sub LLC, a direct wholly owned subsidiary of the company. The transaction is structured as a merger pursuant to which Water Merger Sub will merge with and into Waste Connections, with each share of Waste Connections stock automatically converting into the right to receive 2.076843 common shares of the company.

Additionally, pursuant to the merger agreement, the company will assume certain equity incentive awards of Waste Connections outstanding immediately prior to the Merger.