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The firm reported revenue of $419.1 million for the second quarter of 2019 and continues to focus on maintaining a Service First, Safety Always culture.
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Ponte Vedra, Fla.-based Advanced Disposal Services (ADS) released its second quarter 2019 earnings results. The company, which is being acquired by Waste Management, once again did not hold an earnings call, as it’s in an extended quiet period related to investor communications until the Waste Management transaction is closed.
Advanced Disposal reported revenue of $419.1 million for the three months ended June 30, 2019, versus $398.1 million in the same period of the prior year. Net loss during Q2 2019 was $1.0 million, or $0.01 per diluted share, and adjusted net income, which excludes certain gains and expenses, was $9.0 million, or $0.10 per diluted share.
“Our core business remains strong with 5.3 percent revenue growth including 3.2 percent of pricing gains during second quarter 2019,” said Richard Burke, CEO of Advanced Disposal, in a statement. “Additionally, our commitment to the customers we serve, the safety of our employees and the communities we operate in has never been stronger as we continue to live out our Service First, Safety Always culture. While we have experienced some headwinds year-to-date largely due to recycling, interest costs and leachate from wet operating conditions, we are pleased that we have generated $148.5 million of cash flow from operations and $76.5 million of adjusted free cash flow.”
Second quarter financial highlights include:
Revenue of $419.1 million, representing a 5.3 percent increase.
Achieved average yield of 3.2 percent.
Year-over-year growth from acquisitions was 1.5 percent.
Net loss was $1 million, or $0.01 per diluted share. This included charges of $9.7 million for a fee case settlement, $9.6 million for landfill remediation expenses and $3.6 million for merger-related costs, along with a net benefit of $13.7 million related to a 2012 tax audit settlement.
Achieved adjusted EBITDA was $110.0 million, which included a $2.6 million year-over-year headwind related to declining recycling prices and higher recycling processing costs.
Cash provided by operating activities was $148.5 million year-to-date.
Adjusted free cash flow year-to-date was $76.5 million.
Solid waste collection accounted for 66.7 percent of reported revenue ($279.4 million vs. $269.9 million in 2018). Solid waste disposal and transfer accounted for 36.4 percent ($152.5 million vs. $148.0 million in 2018). Sale of recyclables accounted for 0.6 percent, fuel charges and environmental charges accounted for 7.2 percent, other accounted for 8.3 percent and intercompany eliminations decreased 19.2 percent.
More information about the pending acquisition was discussed during Waste Management’s Q2 2019 earnings call on July 25. Jim Fish, CEO and president of Waste Management, stated that at the end of June, Advanced Disposal stockholders voted to approve Waste Management’s acquisition of the company.
“This stockholder approval is an important milestone in the process toward closing the transaction,” said Fish during the call. “In addition, and as expected, we received a second request from DOJ [Department of Justice Acquisition Management Bureau], and we continue to work with them to satisfy this request. We remain on track to complete the acquisition during the first quarter of 2020 as we continue our progress toward completing this transaction. We have dedicated teams working to position us to fully integrate ADS when the time comes.”
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