PONTE VEDRA, Fla., Feb. 22, 2018 /PRNewswire/ -- Advanced Disposal Services, Inc. (NYSE: ADSW), (d/b/a Advanced Disposal) announced today revenue for the three months ended December 31, 2017 of $384.4 million versus $352.0 million in the same period of the prior year. Net income during fourth quarter 2017 was $42.0 million, or $0.47 per diluted share, versus a net loss of $20.1 million, or $0.24 per diluted share in fourth quarter 2016. Excluding certain gains and expenses, adjusted net income in fourth quarter 2017 was $11.2 million and adjusted diluted earnings per share was $0.13.
"One of our key areas of focus is cash flow generation, and we are pleased that for 2017 Advanced Disposal achieved a 30% increase in cash from operations and 40% increase in adjusted free cash flow year-over-year," said Richard Burke, CEO. "We also are seeing strong top-line growth, which should position us well as we move into 2018."
Fourth Quarter and Full Year Highlights
Fiscal Year 2018 Guidance
Advanced Disposal's guidance is based on current economic conditions and does not assume any significant changes in the overall economy during 2018. Please refer to the Special Note Regarding Forward-Looking Statements section of this press release.
Advanced Disposal will conduct a quarterly earnings conference call on February 23, 2018 at 10:00 a.m. EST. The call can be accessed by dialing (866) 478-7805 domestically or (832) 445-1679 internationally and asking for conference ID 3099638 or the Advanced Disposal Q4 2017 earnings call. This call will be recorded and available via replay approximately two hours after the completion of the earnings call for thirty days. You may access the recording by dialing (855) 859-2056 or through the link on the investor relations page of our website at www.AdvancedDisposal.com.
The calculation of free cash flow and adjusted free cash flow, as well as details of charges and other expenses that are excluded from EBITDA and net income (loss) in arriving at adjusted EBITDA and adjusted net income, are contained in the "Reconciliation of Certain Non-GAAP Measures" section of this press release.
SUPPLEMENTAL UNAUDITED FINANCIAL INFORMATION AND OPERATING | |||||||||||||||
Advanced Disposal Services, Inc. | |||||||||||||||
Statements of Operations | |||||||||||||||
(in millions, except share and per share data) | |||||||||||||||
Three Months Ended December 31, |
Year Ended December 31, | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
Service revenues |
$ |
384.4 |
$ |
352.0 |
$ |
1,507.6 |
$ |
1,404.6 |
|||||||
Operating costs and expenses |
|||||||||||||||
Operating |
245.0 |
212.9 |
962.1 |
865.5 |
|||||||||||
Selling, general and administrative |
42.1 |
37.3 |
169.5 |
157.0 |
|||||||||||
Depreciation and amortization |
71.9 |
57.5 |
269.8 |
246.9 |
|||||||||||
Acquisition and development costs |
0.1 |
0.5 |
1.3 |
0.7 |
|||||||||||
Loss on disposal of assets and asset impairments |
0.3 |
0.6 |
11.4 |
1.8 |
|||||||||||
Restructuring charges |
? |
? |
3.4 |
0.8 |
|||||||||||
Total operating costs and expenses |
359.4 |
308.8 |
1,417.5 |
1,272.7 |
|||||||||||
Operating income |
25.0 |
43.2 |
90.1 |
131.9 |
|||||||||||
Other (expense) income |
|||||||||||||||
Interest expense |
(23.3) |
(27.5) |
(93.0) |
(130.2) |
|||||||||||
Loss on debt extinguishments and modifications |
(3.7) |
(64.7) |
(3.7) |
(64.7) |
|||||||||||
Other income, net |
4.2 |
6.0 |
3.7 |
6.9 |
|||||||||||
Total other expense |
(22.8) |
(86.2) |
(93.0) |
(188.0) |
|||||||||||
Income (loss) before income taxes |
2.2 |
(43.0) |
(2.9) |
(56.1) |
|||||||||||
Income tax benefit |
(39.8) |
(22.9) |
(41.2) |
(25.7) |
|||||||||||
Net income (loss) |
$ |
42.0 |
$ |
(20.1) |
$ |
38.3 |
$ |
(30.4) |
|||||||
Net loss attributable to common stockholders per share |
|||||||||||||||
Basic income (loss) per share |
$ |
0.47 |
$ |
(0.24) |
$ |
0.43 |
$ |
(0.44) |
|||||||
Diluted income (loss) per share |
$ |
0.47 |
$ |
(0.24) |
$ |
0.43 |
$ |
(0.44) |
|||||||
Basic average shares outstanding |
88,479,341 |
84,262,502 |
88,323,213 |
69,462,798 |
|||||||||||
Diluted average shares outstanding |
89,106,848 |
84,262,502 |
88,887,812 |
69,462,798 |
Advanced Disposal Services, Inc. | |||||||
Consolidated Balance Sheets | |||||||
(in millions, except shares) | |||||||
December 31, | |||||||
2017 |
2016 | ||||||
Assets |
|||||||
Current assets |
|||||||
Cash and cash equivalents |
$ |
6.8 |
$ |
1.2 |
|||
Accounts receivable, net of allowance for doubtful accounts of $5.4 and $4.0, respectively |
199.9 |
183.2 |
|||||
Prepaid expenses and other current assets |
37.9 |
30.3 |
|||||
Total current assets |
244.6 |
214.7 |
|||||
Other assets |
23.0 |
23.3 |
|||||
Property and equipment, net of accumulated depreciation of $1,355.5 and $1,163.0, respectively |
1,728.8 |
1,633.4 |
|||||
Goodwill |
1,208.2 |
1,173.9 |
|||||
Other intangible assets, net of accumulated amortization of $247.6 and $210.7, respectively |
288.7 |
324.6 |
|||||
Total assets |
$ |
3,493.3 |
$ |
3,369.9 |
|||
Liabilities and Stockholders' Equity |
|||||||
Current liabilities |
|||||||
Accounts payable |
$ |
92.3 |
$ |
86.5 |
|||
Accrued expenses |
113.0 |
109.8 |
|||||
Deferred revenue |
69.1 |
62.5 |
|||||
Current maturities of landfill retirement obligations |
20.2 |
29.3 |
|||||
Current maturities of long-term debt |
74.1 |
36.5 |
|||||
Total current liabilities |
368.7 |
324.6 |
|||||
Other long-term liabilities |
61.5 |
54.2 |
|||||
Long-term debt, less current maturities |
1,884.2 |
1,887.0 |
|||||
Accrued landfill retirement obligations, less current maturities |
205.7 |
161.8 |
|||||
Deferred income taxes |
88.6 |
112.8 |
|||||
Total liabilities |
2,608.7 |
2,540.4 |
|||||
Equity |
|||||||
Common stock: $.01 par value, 1,000,000,000 shares authorized, 88,491,194 and 88,034,813 |
0.9 |
0.8 |
|||||
Additional paid-in capital |
1,487.4 |
1,470.3 |
|||||
Accumulated other comprehensive loss |
(0.4) |
? |
|||||
Accumulated deficit |
(603.3) |
(641.6) |
|||||
Treasury stock at cost, 2,274 and 0 shares, respectively |
? |
? |
|||||
Total stockholders' equity |
884.6 |
829.5 |
|||||
Total liabilities and stockholders' equity |
$ |
3,493.3 |
$ |
3,369.9 |
Advanced Disposal Services, Inc. | |||||||
Consolidated Statements of Cash Flows | |||||||
(in millions) |
Year Ended December 31, | ||||||
2017 |
2016 | ||||||
Cash flows from operating activities |
|||||||
Net income (loss) |
$ |
38.3 |
$ |
(30.4) |
|||
Adjustments to reconcile net income (loss) to net cash provided by operating activities |
|||||||
Depreciation and amortization |
269.8 |
246.9 |
|||||
Change in fair value of derivative instruments |
(1.5) |
(18.5) |
|||||
Amortization of debt issuance costs and original issue discount |
6.3 |
17.5 |
|||||
Loss on debt extinguishments and modifications |
3.7 |
64.7 |
|||||
Accretion on landfill retirement obligations |
15.4 |
13.0 |
|||||
Other accretion and amortization |
3.5 |
4.0 |
|||||
Provision for doubtful accounts |
5.4 |
3.7 |
|||||
Loss on disposition of property and equipment |
1.6 |
3.5 |
|||||
Impairment of assets |
13.0 |
? |
|||||
Gain on disposition of business |
(2.8) |
(1.7) |
|||||
Stock based compensation |
10.2 |
6.3 |
|||||
Deferred tax benefit |
(41.3) |
(26.5) |
|||||
Earnings in equity investee |
(1.6) |
(1.8) |
|||||
Changes in operating assets and liabilities, net of businesses acquired |
|||||||
Increase in accounts receivable |
(17.7) |
(8.8) |
|||||
(Increase) decrease in prepaid expenses and other current assets |
(5.9) |
2.8 |
|||||
Decrease in other assets |
2.4 |
1.8 |
|||||
Increase (decrease) in accounts payable |
4.1 |
(0.9) |
|||||
Decrease in accrued expenses |
(2.6) |
(14.3) |
|||||
Increase (decrease) in deferred revenue |
2.2 |
(1.0) |
|||||
Increase (decrease) in other long-term liabilities |
0.6 |
(3.4) |
|||||
Capping, closure and post-closure obligations |
(18.3) |
(19.9) |
|||||
Assumption of long-term care and closure reserve |
24.0 |
? |
|||||
Net cash provided by operating activities |
308.8 |
237.0 |
|||||
Cash flows from investing activities |
|||||||
Purchases of property and equipment and construction and development |
(186.6) |
(171.0) |
|||||
Proceeds from sale of property and equipment |
2.2 |
3.3 |
|||||
Acquisition of businesses, net of cash acquired |
(111.9) |
(5.4) |
|||||
Proceeds from sale of businesses |
8.7 |
2.5 |
|||||
Net cash used in investing activities |
(287.6) |
(170.6) |
|||||
Cash flows from financing activities |
|||||||
Proceeds from borrowings on debt instruments |
326.2 |
782.8 |
|||||
Repayments on debt instruments, including capital leases |
(347.0) |
(1,164.4) |
|||||
Bank overdraft |
? |
(2.6) |
|||||
Proceeds from issuance of common stock |
? |
375.6 |
|||||
Costs associated with issuance of common stock |
? |
(1.9) |
|||||
Costs associated with debt extinguishments and modifications |
(1.8) |
(50.9) |
|||||
Proceeds from stock option exercises |
7.0 |
17.4 |
|||||
Return of capital to former parent |
? |
(21.8) |
|||||
Net cash used in financing activities |
(15.6) |
(65.8) |
|||||
Net increase in cash and cash equivalents |
5.6 |
0.6 |
|||||
Cash and cash equivalents, beginning of year |
1.2 |
0.6 |
|||||
Cash and cash equivalents, end of year |
$ |
6.8 |
$ |
1.2 |
You should read the following information in conjunction with our audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2017 appearing in our Annual Report on Form 10-K to be filed with the Securities and Exchange Commission.
REVENUE
The following table reflects our revenue by line of business for the periods presented (in millions and as a percentage of revenue):
Three Months Ended December 31, |
Year Ended December 31, | ||||||||||||||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||||||||||||||
Collection |
$ |
264.3 |
68.8 |
% |
$ |
243.4 |
69.1 |
% |
$ |
1,017.4 |
67.5 |
% |
$ |
977.4 |
69.6 |
% | |||||||||||
Disposal |
134.7 |
35.0 |
% |
126.6 |
36.0 |
% |
542.5 |
36.0 |
% |
517.9 |
36.9 |
% | |||||||||||||||
Sale of recyclables |
5.6 |
1.5 |
% |
6.3 |
1.8 |
% |
33.2 |
2.2 |
% |
22.6 |
1.6 |
% | |||||||||||||||
Fuel fees and |
27.9 |
7.3 |
% |
23.9 |
6.8 |
% |
103.9 |
6.9 |
% |
88.5 |
6.3 |
% | |||||||||||||||
Other |
25.6 |
6.7 |
% |
19.2 |
5.5 |
% |
104.4 |
6.9 |
% |
74.7 |
5.3 |
% | |||||||||||||||
Intercompany eliminations |
(73.7) |
(19.3) |
% |
(67.4) |
(19.2) |
% |
(293.8) |
(19.5) |
% |
(276.5) |
(19.7) |
% | |||||||||||||||
Total |
$ |
384.4 |
100.0 |
% |
$ |
352.0 |
100.0 |
% |
$ |
1,507.6 |
100.0 |
% |
$ |
1,404.6 |
100.0 |
% |
The following table reflects changes in revenue, as compared to the prior year:
Three Months Ended December 31, |
Year Ended December 31, | ||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||
Average yield |
1.1 |
% |
2.7 |
% |
1.2 |
% |
2.2 |
% | |||
Recycling |
(0.2) |
% |
0.3 |
% |
0.8 |
% |
0.1 |
% | |||
Fuel fee revenue |
0.5 |
% |
(0.3) |
% |
0.4 |
% |
(0.7) |
% | |||
Total yield |
1.4 |
% |
2.7 |
% |
2.4 |
% |
1.6 |
% | |||
Organic volume |
2.9 |
% |
(3.0) |
% |
1.4 |
% |
(1.7) |
% | |||
Acquisitions |
5.5 |
% |
1.5 |
% |
3.9 |
% |
1.8 |
% | |||
Divestitures |
(0.6) |
% |
(0.5) |
% |
(0.4) |
% |
(1.1) |
% | |||
Total revenue change |
9.2 |
% |
0.7 |
% |
7.3 |
% |
0.6 |
% |
OPERATING EXPENSES
The following table summarizes our operating expenses for the periods presented (in millions and as a percentage of revenue):
Three Months Ended December 31, |
Year Ended December 31, | ||||||||||||||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||||||||||||||
Operating |
$ |
240.7 |
62.6 |
% |
$ |
209.7 |
59.6 |
% |
$ |
946.7 |
62.8 |
% |
$ |
852.5 |
60.7 |
% | |||||||||||
Accretion of landfill retirement obligations |
4.3 |
1.1 |
% |
3.2 |
0.9 |
% |
15.4 |
1.0 |
% |
13.0 |
0.9 |
% | |||||||||||||||
Operating expenses |
$ |
245.0 |
63.7 |
% |
$ |
212.9 |
60.5 |
% |
$ |
962.1 |
63.8 |
% |
$ |
865.5 |
61.6 |
% |
The following table summarizes the major components of our operating expenses, excluding accretion expense on landfill retirement obligations for the periods presented (in millions and as a percentage of revenue):
Three Months Ended December 31, |
Year Ended December 31, | ||||||||||||||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||||||||||||||
Labor and related benefits |
$ |
80.0 |
20.8 |
% |
$ |
72.2 |
20.5 |
% |
$ |
313.2 |
20.8 |
% |
$ |
292.4 |
20.8 |
% | |||||||||||
Transfer and disposal costs |
50.2 |
13.1 |
% |
46.9 |
13.3 |
% |
205.0 |
13.6 |
% |
188.9 |
13.4 |
% | |||||||||||||||
Maintenance and repairs |
34.8 |
9.1 |
% |
31.0 |
8.8 |
% |
139.3 |
9.2 |
% |
129.4 |
9.2 |
% | |||||||||||||||
Fuel |
19.3 |
5.0 |
% |
14.8 |
4.2 |
% |
68.3 |
4.5 |
% |
55.2 |
3.9 |
% | |||||||||||||||
Franchise fees and taxes |
17.1 |
4.4 |
% |
16.2 |
4.6 |
% |
67.8 |
4.5 |
% |
65.2 |
4.6 |
% | |||||||||||||||
Risk management |
9.2 |
2.4 |
% |
5.9 |
1.7 |
% |
33.8 |
2.2 |
% |
28.7 |
2.1 |
% | |||||||||||||||
Other |
26.8 |
7.0 |
% |
22.7 |
6.5 |
% |
108.2 |
7.3 |
% |
92.7 |
6.7 |
% | |||||||||||||||
Subtotal |
$ |
237.4 |
61.8 |
% |
$ |
209.7 |
59.6 |
% |
$ |
935.6 |
62.1 |
% |
$ |
852.5 |
60.7 |
% | |||||||||||
Greentree expenses, net of estimated |
3.3 |
0.8 |
% |
? |
? |
% |
11.1 |
0.7 |
% |
? |
? |
% | |||||||||||||||
Operating expenses, excluding accretion expense |
$ |
240.7 |
62.6 |
% |
$ |
209.7 |
59.6 |
% |
$ |
946.7 |
62.8 |
% |
$ |
852.5 |
60.7 |
% |
SELLING, GENERAL AND ADMINISTRATIVE
The following table summarizes our selling, general and administrative expenses for the periods presented (in millions and as a percentage of revenue):
Three Months Ended December 31, |
Year Ended December 31, | ||||||||||||||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||||||||||||||
Salaries |
$ |
24.2 |
6.3 |
% |
$ |
23.9 |
6.8 |
% |
$ |
105.5 |
7.0 |
% |
$ |
95.8 |
6.8 |
% | |||||||||||
Legal and professional |
5.2 |
1.4 |
% |
1.9 |
0.5 |
% |
13.9 |
0.9 |
% |
16.2 |
1.2 |
% | |||||||||||||||
Other |
12.7 |
3.3 |
% |
11.5 |
3.3 |
% |
50.1 |
3.3 |
% |
45.0 |
3.2 |
% | |||||||||||||||
Total selling, general and |
$ |
42.1 |
11.0 |
% |
$ |
37.3 |
10.6 |
% |
$ |
169.5 |
11.2 |
% |
$ |
157.0 |
11.2 |
% |
ADDITIONAL STATISTICS
The following table reflects cash interest and cash taxes for the periods presented (in millions):
Three Months Ended December 31, |
Year Ended December 31, | ||||||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||||||
Cash paid for interest |
$ |
27.6 |
$ |
44.0 |
$ |
86.2 |
$ |
119.4 |
|||||||||||
Cash paid for taxes |
0.4 |
0.1 |
1.4 |
1.5 |
Internalization for the three months ended December 31, 2017: 62%
Days Sales Outstanding for the three months ended December 31, 2017: 48 (31 net of deferred revenue)
RECONCILIATION OF CERTAIN NON-GAAP MEASURES
EBITDA, adjusted EBITDA, adjusted EBITDA margin, free cash flow, adjusted free cash flow and adjusted net income are not defined terms under U.S. generally accepted accounting principles ("non-GAAP measures"). Non-GAAP measures should not be considered in isolation or as a substitute for net income, income per diluted share or cash flow data prepared in accordance with GAAP and may not be comparable to calculations of similarly titled measures by other companies.
We define EBITDA as net income (loss) from continuing operations adjusted for interest, taxes, depreciation and amortization and accretion. We define adjusted EBITDA as EBITDA adjusted to exclude non-cash and non-recurring items as well as other adjustments permitted in calculating covenant compliance under the agreements governing our outstanding debt securities and credit facilities. We believe adjusted EBITDA is useful to investors in evaluating our performance compared to other companies in our industry because it eliminates the effect of financing, income taxes and the accounting effects of capital spending, as well as certain items that are not indicative of our performance on an ongoing basis. Management uses adjusted EBITDA to measure the performance of our core operations at the consolidated, segment and business unit levels and as a metric for a significant portion of our management incentive plans.
We define free cash flow as net cash provided by operating activities less capital expenditures (purchases of property and equipment, excluding expenditures for significant new municipal contracts and significant purchases of land for future landfill airspace), net of proceeds from the sale of property and equipment. We define adjusted free cash flow as free cash flow excluding restructuring payments, capital markets costs, and non-recurring items. Management uses adjusted free cash flow to evaluate the Company's ability to generate cash to fund its activities on an ongoing basis, and we believe adjusted free cash flow is useful to investors in evaluating our performance compared to other companies in our industry because it eliminates the effect of restructuring payments, capital market costs, and other non-recurring items, which are not indicative of our ability to generate cash on an ongoing basis.
We define adjusted net income and adjusted earnings per share as net income (loss) from continuing operations and diluted earnings per share adjusted to exclude non-cash and non-recurring items. We believe adjusted net income and adjusted earnings per share provide an understanding of operational activities before the financial impact of certain items. We believe that these measures are useful in evaluating our operations as these measures are adjusted for items that affect comparability between periods.
In fiscal 2014, we made a strategic decision to enter into fuel derivatives as economic hedges of a rise in the price of diesel fuel for fiscal 2015 and fiscal 2016. We have not entered into fuel derivatives since fiscal 2014 when the economic hedges for fiscal 2015 and fiscal 2016 were put in place and have no present intention to enter into fuel derivatives. We therefore believe that excluding realized losses from fuel derivatives provides useful additional information for investors to evaluate comparability among periods and is consistent with how management evaluates performance. In fiscal 2016, we entered into interest rate caps as economic hedges of a rise in interest rates for fiscal 2017, fiscal 2018 and the nine months ended September 30, 2019. We believe that excluding realized and unrealized gains and losses from interest rate derivatives from our adjusted EBITDA provides useful additional information in evaluating ongoing financial performance of the business as these derivatives represent a risk management tool to reduce our exposure to rising interest rates and are viewed by management as a financing cost similar to interest expense. We also purchased additional interest rate caps in fiscal 2017 to hedge the risk of rising interest rates from October 1, 2019 to September 30, 2021. These interest rate caps qualify for hedge accounting and realized gains and losses will flow through interest expense, which is excluded from adjusted EBITDA.
ADJUSTED EBITDA
The following table calculates adjusted earnings before interest, taxes, depreciation, amortization and accretion adjusted for certain other costs (in millions except percentages):
Three Months Ended December 31, |
Year Ended December 31, | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
Net income (loss) |
$ |
42.0 |
$ |
(20.1) |
$ |
38.3 |
$ |
(30.4) |
|||||||
Income tax benefit |
(39.8) |
(22.9) |
(41.2) |
(25.7) |
|||||||||||
Interest expense |
23.3 |
27.5 |
93.0 |
130.2 |
|||||||||||
Depreciation and amortization |
71.9 |
57.5 |
269.8 |
246.9 |
|||||||||||
Loss on debt extinguishments and modifications |
3.7 |
64.7 |
3.7 |
64.7 |
|||||||||||
Accretion on landfill retirement obligations |
4.3 |
3.2 |
15.4 |
13.0 |
|||||||||||
Accretion on loss contracts and other long-term liabilities |
0.1 |
0.1 |
0.4 |
0.4 |
|||||||||||
EBITDA from continuing operations |
105.5 |
110.0 |
379.4 |
399.1 |
|||||||||||
EBITDA adjustments: |
|||||||||||||||
Acquisition and development costs |
0.1 |
0.5 |
1.3 |
0.7 |
|||||||||||
Stock based compensation |
1.8 |
1.5 |
9.7 |
5.5 |
|||||||||||
Greentree expenses, net of estimated insurance recoveries |
3.3 |
? |
11.1 |
? |
|||||||||||
Earnings in equity investee, net |
0.3 |
0.2 |
0.3 |
(0.3) |
|||||||||||
Restructuring charges |
? |
? |
3.4 |
0.8 |
|||||||||||
Loss on disposal of assets and asset impairments |
0.3 |
0.6 |
11.4 |
1.8 |
|||||||||||
Unrealized gain on derivatives |
(3.2) |
(8.0) |
(1.5) |
(18.5) |
|||||||||||
Capital market costs |
0.6 |
(0.1) |
1.0 |
7.1 |
|||||||||||
Realized loss on derivatives |
0.5 |
3.0 |
2.0 |
14.9 |
|||||||||||
Other |
(0.4) |
? |
? |
? |
|||||||||||
Adjusted EBITDA |
$ |
108.8 |
$ |
107.7 |
$ |
418.1 |
$ |
411.1 |
|||||||
Revenue |
$ |
384.4 |
$ |
352.0 |
$ |
1,507.6 |
$ |
1,404.6 |
|||||||
Adjusted EBITDA margin |
28.3 |
% |
30.6 |
% |
27.7 |
% |
29.3 |
% |
ADJUSTED FREE CASH FLOW
The following table calculates free cash flow and adjusted free cash flow (in millions):
Three Months Ended |
Year Ended | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
Net cash provided by operating activities |
$ |
61.4 |
$ |
45.3 |
$ |
308.8 |
$ |
237.0 |
|||||||
Purchases of property & equipment (a) |
(46.1) |
(46.8) |
(174.8) |
(171.0) |
|||||||||||
Proceeds from the sale of property & equipment |
0.4 |
1.1 |
2.2 |
3.3 |
|||||||||||
Free cash flow |
15.7 |
(0.4) |
136.2 |
69.3 |
|||||||||||
Assumption of long-term care and closure reserves, net (b) |
2.0 |
? |
(20.0) |
? |
|||||||||||
Restructuring payments |
0.4 |
0.4 |
0.8 |
2.1 |
|||||||||||
Payment to retired executive |
? |
? |
6.2 |
? |
|||||||||||
Greentree costs, net of insurance recoveries |
1.0 |
? |
5.7 |
? |
|||||||||||
Capital market costs |
0.6 |
0.4 |
0.9 |
7.7 |
|||||||||||
Adjusted free cash flow |
$ |
19.7 |
$ |
0.4 |
$ |
129.8 |
$ |
79.1 |
|||||||
Realized loss on derivatives |
0.5 |
3.0 |
2.0 |
14.9 |
|||||||||||
Adjusted free cash flow excluding realized loss on derivatives |
$ |
20.2 |
$ |
3.4 |
$ |
131.8 |
$ |
94.0 |
(a) Excludes the impact of land purchased for future airspace of $3.1 million during first quarter 2017 and the purchase of a facility related to a municipal contract of $8.7 million during third quarter 2017.
(b) The Company received a cash payment of $24.0 million during first quarter 2017 that is included in net cash provided by operating activities in exchange for assuming certain post-closure liabilities of a closed portion of a landfill and became responsible for expenditures related to a gas infrastructure system. The assumed post-closure liabilities and expenditures related to the gas infrastructure system approximate the amount of the cash payment. The Company paid $4.0 million of these costs during 2017.
ADJUSTED NET INCOME
The following table calculates adjusted net income (in millions except per share data):
Three Months Ended |
Year Ended | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
Net income (loss) |
$ |
42.0 |
$ |
(20.1) |
$ |
38.3 |
$ |
(30.4) |
|||||||
Loss on debt extinguishments and modifications |
3.7 |
64.7 |
3.7 |
64.7 |
|||||||||||
Amortization of intangibles |
10.3 |
10.4 |
41.5 |
42.6 |
|||||||||||
Acquisition and development costs |
0.1 |
0.5 |
1.3 |
0.7 |
|||||||||||
Restructuring charges |
? |
? |
3.4 |
0.8 |
|||||||||||
Loss on disposal of assets and asset impairments |
0.3 |
0.6 |
11.4 |
1.8 |
|||||||||||
Unrealized gain on derivatives |
(3.2) |
(8.0) |
(1.5) |
(18.5) |
|||||||||||
Capital market costs |
0.6 |
(0.1) |
1.0 |
7.1 |
|||||||||||
Greentree expenses, net of estimated insurance recoveries |
3.3 |
? |
11.1 |
? |
|||||||||||
Realized loss on derivatives |
0.5 |
3.0 |
2.0 |
14.9 |
|||||||||||
Tax effect |
(6.0) |
(28.4) |
(29.6) |
(44.8) |
|||||||||||
Tax impact of stock option exercises post IPO |
? |
(5.4) |
? |
(5.4) |
|||||||||||
Tax effect of Tax Cuts and Jobs Act |
(40.4) |
? |
(40.4) |
? |
|||||||||||
Adjusted net income |
$ |
11.2 |
$ |
17.2 |
$ |
42.2 |
$ |
33.5 |
|||||||
Diluted earnings per common share: |
|||||||||||||||
Adjusted average shares outstanding |
89,106,848 |
84,425,401 |
88,887,812 |
70,325,456 |
|||||||||||
Adjusted earnings per common share |
$ |
0.13 |
$ |
0.20 |
$ |
0.47 |
$ |
0.48 |
RECONCILIATION OF 2018 ADJUSTED FREE CASH FLOW OUTLOOK
2018 Outlook | |
Net cash provided by operating activities |
$318.0 - $338.0 |
Purchases of property and equipment and construction and development |
(184.0) - ($194.0) |
Adjusted free cash flow |
$134.0 - $144.0 |
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements within the meaning of the U.S. federal securities laws. All statements other than statements of historical facts in this document, including, without limitation, those regarding our business strategy, financial position, results of operations, plans, prospects and objectives of management for future operations (including development plans and objectives relating to our activities), are forward-looking statements. Many, but not all, of these statements can be found by looking for words like "expect," "anticipate," "goal," "project," "plan," "believe," "seek," "will," "may," "forecast," "estimate," "intend" and "future" and similar words. Statements that address activities, events or developments that we intend, expect or believe may occur in the future are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and section 21E of the Securities Exchange Act of 1934, as amended and are subject to safe harbor created by those sections. Forward-looking statements do not guarantee future performance and may involve risks, uncertainties and other factors which could cause our actual results, performance or achievements to differ materially from the future results, performance or achievements expressed or implied in those forward-looking statements.
There are a number of risks, uncertainties and other important factors, many of which are beyond our control, which could cause actual results to differ materially from the forward-looking statements contained in this release. Such risks, uncertainties and factors include those set forth under the heading Risk Factors in our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission.
Examples of these risks, uncertainties and other factors include, but are not limited to:
The above examples are not exhaustive and new risks may emerge from time to time. Except as required by law, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Such forward-looking statements are based on our current beliefs, assumptions, expectations, estimates and projections regarding our present and future business strategies and the environment in which we will operate in the future. These forward-looking statements speak only as of the date of this report. We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement contained herein to reflect any change in our expectations with regard thereto or any change of events, conditions or circumstances on which any such statement was based.
About Advanced Disposal
Advanced Disposal (NYSE: ADSW) brings fresh ideas and solutions to the business of a clean environment. We provide integrated, non-hazardous solid waste collection, recycling and disposal services to residential, commercial, industrial and construction customers across 16 states and the Bahamas. Our team is dedicated to finding effective, sustainable solutions to preserve the environment for future generations. We welcome you to learn more at AdvancedDisposal.com or follow us on Facebook.
SOURCE Advanced Disposal Services, Inc.
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