Waste Connections, Inc. (WCN)

WCN 
$47.94
*  
0.32
0.67%
Get WCN Alerts
*Delayed - data as of Jul. 11, 2014  -  Find a broker to begin trading WCN now
Exchange: NYSE
Industry: Public Utilities
Community Rating:
 
 
Symbol List Views
FlashQuotes InfoQuotes
Stock Details
Summary Quote Real-Time Quote After Hours Quote Pre-market Quote Historical Quote Option Chain
CHARTS
Basic Chart Interactive Chart
COMPANY NEWS
Company Headlines Press Releases Market Stream
STOCK ANALYSIS
Analyst Research Guru Analysis Stock Report Competitors Stock Consultant Stock Comparison
FUNDAMENTALS
Call Transcripts Annual Report Income Statement Revenue/EPS SEC Filings Short Interest Dividend History
HOLDINGS
Ownership Summary Institutional Holdings Insiders
(SEC Form 4)
 Save stocks for next time

Waste Connections (WCN)

Q1 2013 Earnings Call

April 25, 2013 8:30 am ET

Executives

Ronald J. Mittelstaedt - Chairman, Chief Executive Officer, Chairman of Special Equity Award Committee and Chairman of Executive Committee

Worthing F. Jackman - Chief Financial Officer and Executive Vice President

Analysts

Hamzah Mazari - Crédit Suisse AG, Research Division

Alex Ovshey Ovshey - Goldman Sachs Group Inc., Research Division

Michael E. Hoffman - Wunderlich Securities Inc., Research Division

Albert Leo Kaschalk - Wedbush Securities Inc., Research Division

William H. Fisher - Raymond James & Associates, Inc., Research Division

Corey Greendale - First Analysis Securities Corporation, Research Division

Adam R. Thalhimer - BB&T Capital Markets, Research Division

Joe Box - KeyBanc Capital Markets Inc., Research Division

Tony Bancroft - Gabelli & Company, Inc.

Barbara Noverini - Morningstar Inc., Research Division

Jeffrey D. Osborne - Stifel, Nicolaus & Co., Inc., Research Division

Stewart Scharf - S&P Equity Research

Presentation

Operator

Good day, ladies and gentlemen, and welcome to the Q1 2013 Waste Connections' Earnings Conference Call. My name is Alison, and I will be your operator for today. [Operator Instructions] As a reminder, this call is being recorded for replay purposes.

I'd now like to turn the call over to Mr. Ron Mittelstaedt, Chairman of the Board and CEO. Please proceed, sir.

Ronald J. Mittelstaedt

Okay, thank you, operator, and good morning. I'd like to welcome everyone to this conference call to discuss our first quarter 2013 results and provide a detailed outlook for the second quarter.

I'm joined this morning by Steve Bouck, our President; Darrell Chambliss, our COO; Worthing Jackman, our CFO; and several other members of our Senior Management team. As noted in our earnings release, 2013 is off to a great start. Consistently strong pricing growth, improving landfill volumes and increasing E&P activity drove better-than-expected financial results in the first quarter.

Solid waste volume growth slightly exceeded our outlook for the period as well, despite harsh winter weather conditions in many markets. In addition, revenue per day from E&P waste increased about 12.5% from early January to late March.

Adjusted EBITDA was 32.5% of revenue in the first quarter or about 50 basis points above our outlook. More importantly, adjusted free cash flow, a hallmark of our strategy, increased 29% to more than $100 million in the period or 22.3% of revenue. We remain cautiously optimistic about the balance of the year as solid waste pricing growth is already dialed in, year-over-year volume growth comparisons should continue to improve and E&P activity should continue to ramp, especially in the Bakken due to a combination of factors, including seasonal increases and newly permitted on-site solidification capabilities.

Before we get into much more detail, let me turn the call over to Worthing for our forward-looking disclaimer, as well as other housekeeping items.

Worthing F. Jackman

Thank you, Ron, good morning. We must inform everyone listening that certain matters discussed in this conference call are forward-looking statements, intended to qualify for the Safe Harbor's from liability established by the Private Securities Litigation Reform Act of 1995, including statements related to expected volume and pricing trends, E&P activity in margins, recycled commodity prices, expectations regarding period-to-period comparisons, potential acquisition activity, contributions from closed acquisitions, the timing of permitting activities and inquiries related to MLP treatment, the impact of the relocation of the company's corporate headquarters from California to Texas and our second quarter outlook for financial results.

Such forward-looking statements are subject to various risks and uncertainties, which could cause actual results to differ materially from those currently anticipated. These risks and uncertainties are set forth in the company's periodic filings with the Securities and Exchange Commission.

Stockholders, potential investors and other participants are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements.

The forward-looking statements made herein are made only as of the date of this conference call and the company undertakes no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.

On the call, we will discuss non-GAAP measures, such as adjusted EBITDA, adjusted net income and adjusted net income per diluted share and adjusted free cash flow. Please refer to our earnings release for a reconciliation of such non-GAAP measures to the most comparable GAAP measure. Management uses certain non-GAAP measures to evaluate and monitor the ongoing financial performance of our operations, other companies may calculate these non-GAAP items differently.

I will now turn the call back over to Ron.

Ronald J. Mittelstaedt

Okay, thank you, Worthing. Revenue in Q1 was $449.9 million, up 19.5% over the prior-year period. As noted earlier, revenue met the upper end of our expectations, despite harsh winter weather conditions in multiple markets.

Internal growth in the quarter was almost 1% broken down as follows: Positive 2.8% from core price; positive 0.4% from surcharges; negative 1.9%, volume; and negative 0.4% from recycling, intermodal and other services. Net pricing, or core price plus surcharges, exceeded 3% again this quarter and was 3.2% similar to Q4. Pricing growth for the full year remains on track to average about 3%.

Volume growth in Q1 was negative 1.9%, an improvement over Q4 and slightly better than our outlook of negative 2% to negative 2.5% for the quarter due to better-than-expected landfill volumes more than offsetting the negative impact of harsh winter weather conditions in many markets.

2 items we have discussed on previous calls, namely our decision in early 2012 to turn away lower-priced volumes at our Chiquita Canyon landfill and the wrongful termination later in that year of a municipal contract in Madera, California that we are now litigating. These 2 accounted for about 65% of our volume loss in the period. Reported volume growth was also impacted by one less day in the comparative period.

Read the rest of this transcript for free on seekingalpha.com