Item 7.01 Regulation FD Disclosure.
During our earnings conference call on August 7, 2020, we highlighted the
following outlook for the third quarter 2020.
(Dollar amounts are approximations)
For the third quarter of the year, we estimate our revenue to be approximately
$1.370 billion. We expect price plus volume growth for solid waste to range
between negative 2.5% and negative 3.5%, with price growth in the range of 4% to
4.5% and volume growth in the range of negative 7.0% to negative 7.5%. Net
income attributable to Waste Connections is estimated to be approximately $146.9
million. Adjusted EBITDA, as reconciled below, is estimated to be approximately
$420 million.
Q3 2020 OUTLOOK
NON-GAAP RECONCILIATION SCHEDULE
(in thousands of U.S. dollars, except where noted)
Reconciliation of Adjusted EBITDA:
Q3 2020 Outlook
Estimates Observation
Net income attributable
to Waste Connections $ 146,850
Plus: Income tax Approximately 21.5%
provision 40,300 effective rate
Plus: Interest expense,
net of interest income 40,000
Plus: Depreciation and Approximately 11.4% of
depletion 156,500 revenue
Approximately 2.4% of
revenue, or $0.09 per
Plus: Amortization 32,600 diluted share net of taxes
Plus: Closure and
post-closure accretion 3,750
Approximately 30.7% of
Adjusted EBITDA $ 420,000 revenue
These estimates assume no significant change in underlying economic trends.
They also exclude any impact from additional acquisitions that may close during
the remainder of the year, and expensing of transaction-related items during the
period.
Adjusted EBITDA, a non-GAAP financial measure, is provided supplementally
because it is widely used by investors as a performance and valuation measure in
the solid waste industry. Management uses adjusted EBITDA as one of the
principal measures to evaluate and monitor the ongoing financial performance of
our operations. We define adjusted EBITDA as net income (loss) attributable to
Waste Connections, plus or minus net income (loss) attributable to
noncontrolling interests, plus or minus income tax provision (benefit), plus
interest expense, less interest income, plus depreciation and amortization
expense, plus closure and post-closure accretion expense, plus or minus any loss
or gain on impairments and other operating items, plus other expense, less other
income. We further adjust this calculation to exclude the effects of other
items management believes impact the ability to assess the operating performance
of our business. This measure is not a substitute for, and should be used in
conjunction with, GAAP financial measures. Other companies may calculate
adjusted EBITDA differently.
The information furnished in Item 7.01 is not deemed "filed" for purposes of
Section 18 of the Securities Exchange Act of 1934, as amended, is not subject to
the liabilities of that section, and is not deemed incorporated by reference in
any filing under the Securities Act of 1933, as amended.
Safe Harbor and Forward-Looking Information
This document contains forward-looking statements within the meaning of the safe
harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995
("PSLRA"), including "forward-looking information" within the meaning of
applicable Canadian securities laws. These forward-looking statements are
neither historical facts nor assurances of future performance and reflect Waste
Connections' current beliefs and expectations regarding future events and
operating performance. These forward-looking statements are often identified by
the words "may," "might," "believes," "thinks,"
"expects," "estimate," "continue," "intends" or other words of similar meaning.
All of the forward-looking statements included in this document are made
pursuant to the safe harbor provisions of the PSLRA and applicable securities
laws in Canada. Forward-looking statements involve risks and uncertainties.
Forward-looking statements in this document include, but are not limited to,
statements about expected third quarter 2020 outlook for financial results.
Important factors that could cause actual results to differ, possibly
materially, from those indicated by the forward-looking statements include, but
are not limited to, risk factors detailed from time to time in the Company's
filings with the SEC and the securities commissions or similar regulatory
authorities in Canada. You should not place undue reliance on forward-looking
statements, which speak only as of the date of this document. Waste Connections
undertakes no obligation to update the forward-looking statements set forth in
this document, whether as a result of new information, future events, or
otherwise, unless required by applicable securities laws.
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