Monday, Waste Connections, Inc (WCN) reported a decline in profit for the fourth quarter, notwithstanding a 19.4% growth in revenues. On an adjusted basis, net income increased, adjusted for costs primarily associated with the early termination of certain interest swaps, the elimination of acquisition-related costs expensed in 2008 related to the LeMay transaction, the elimination of a loss on the company's prior corporate office lease and the elimination of a loss on disposal of assets primarily related to the sale of certain routes and certain service contract loss. The increase in adjusted net income also reflects a reduction in the company's deferred tax liabilities.
Net income attributable to Waste Connections for the fourth quarter declined to $23.25 million or $0.29 per share from $27.26 million or $0.34 per share in the year-ago period.
The adjusted net income attributable to the company for the quarter rose to $29.31 million or $0.37 per share from $24.29 million or $0.30 per share in the year-ago period.
On average, 8 analysts polled by Thomson Reuters expected the company to earn $0.37 per share for the quarter. Analysts' estimate typically exclude special items.
The company said that adjusted net income attributable to the company increased primarily because it was adjusted for costs associated with the early termination of certain interest rate swaps. The adjusted net income attributable to the company in the year-ago period was adjusted primarily for both acquisition costs associated with the LeMay transaction and a benefit to income tax provision due to a decrease in the company's estimated deferred tax liabilities primarily resulting from the LeMay transaction.
Revenues for the quarter increased 19.4% to $309.89 million from $259.56 million in the comparable quarter a year-ago.
Seven Wall Street analysts estimated a revenue of $308.76 million for the quarter.
According to the Folsom, California-based company cost of operations rose to $181.58 million from $154.53 million a year-ago. Selling, general and administrative expenses rose to $33.61 million from $29.94 million a year-ago. Depreciation expenses increased to $31.67 million from $23.63 million a year-ago and amortization of intangibles increased to $3.61 million from $2.11 million in the year-ago period. The loss on disposal of assets for the quarter was $556 thousand, compared with $60 thousand a year-ago.
Additionally, the company said that on April 1, 2010, it intends to redeem all of its 3.75% Senior Convertible Notes due 2026. The aggregate principal amount of the Notes outstanding is $200 million. Holders may have their Notes redeemed at par plus a make-whole payment, pursuant to the terms of the Indenture governing the Notes, together with accrued and unpaid interest to the redemption date.
Alternatively, holders may convert their Notes pursuant to the terms of the Indenture. The conversion price is $34.00 per share, which is equivalent to a conversion rate of approximately 29.4118 shares of the Company's common stock for each $1,000 principal amount of Notes. On February 5, 2010, the last reported sale price of Waste Connections common stock on the New York Stock Exchange
was $31.37 per share.
The company said that it intends to fund the redemption or any conversion from borrowings under its credit facility.
Cash and cash equivalents at the end of the period declined to $9.63 million from $265.26 million a year-ago.
On December 2, 2009 a market rival, Casella Waste Systems Inc., a solid waste, recycling and resource management services company, reported a loss for its second quarter due to a reduction in solid waste volumes.
Waste Connections said that for the year 2010, it forecasts net income attributable to noncontrolling interests to reduce net income by approximately $1.0 million. It expects revenue for the year 2010 to be approximately $1.28 billion. Seven Wall Street analysts currently estimate a revenue of $1.29 billion for the year 2010.
The company's net income for the fiscal year rose to $109.82 million or $1.37 per share from $102.90 million or $1.44 per share in the year-ago period.
The year-to-date adjusted net income attributable to the company rose to $117.91 or $1.47 per share from $100.27 or $1.40 per share in the prior year period.
Revenues for the fiscal year increased to $1.19 billion from $1.04 billion a year-ago.
The Street estimated earnings of $1.46 per share on a revenue of $1.19 billion for the year.
WCN closed Monday's last trade at $30.96, down $0.41 or 1.31%, on a volume of 388 thousand shares on the New York Stock Exchange. In after hours, the stock declined $0.39 or 1.24%.
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