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Key Takeaways from Progressive Waste’s Q4 2015 Earnings

Progressive Waste reported its financial results for the three months and year ended December 31, 2015.

The firm is in the process of merging with Waste Connections. As a result, it’s recently undergone some management changes and did not hold a conference call with investors to discuss its earnings.

"Our performance in the fourth quarter is in line with the outlook that we provided on October 30, 2015, and reflects continued organic revenue growth in the U.S. and Canada," Progressive CEO Dan Pio said in a statement. "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 start-up of several municipal waste collection contracts in our East region… 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."

Here are the key highlights from the company’s fourth quarter:

  • Progressive had consolidated revenues of $483.9 million, up 1.6 percent on a constant currency basis. That was down from $504.6 million in the fourth quarter of 2014. The increase on a constant currency basis was due in large part to a 1.7 percent increase in overall pricing and higher volumes of 2.1 percent, partially offset by declines in fuel surcharges (1.2 percent), divestitures, net of acquisitions, (1.0 percent) and recycling and other pricing (0.5 percent).
  • Operating income in the fourth quarter 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 quarter of 2014.
  • Organic revenue up 2.3 percent, including price up 1.4 percent and volume up 2.3 percent.
  • Adjusted EBITDA of $125.6 million, down 2.6 percent on a constant currency basis. Adjusted EBITDA margin of 26.0 percent.
  • Free cash flow) of $38.2 million, down 10.1 percent on a constant currency basis.

For the full year, it had the following highlights.

  • Consolidated revenues of $1.925 billion, up 1.1 percent on a constant currency basis. That was down from $2.009.0 billion in 2014.
  • Adjusted EBITDA of $479.9 million, down 2.1 percent on a constant currency basis. Adjusted EBITDA) margin of 24.9 percent.
  • Free cash flow of $150.0 million, down 20.4 percent on a constant currency basis.
  • In terms of the merger, Pio said in a statement, “As noted in the January 19th 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."
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