Allied Waste reports results

Allied Waste Industries, Inc., the nation’s second largest waste services company, reported financial results for its third quarter ended September 30, 2008. For the quarter, income from continuing operations increased 68 percent to $112.5 million, or $0.26 per share, including $0.02 per share associated with merger-related costs. Prior year income from continuing operations was $66.9 million, or $0.15 per share. Prior year earnings include loss on divestiture, impairment and debt refinancing costs of $0.09 per share. On an adjusted basis, 2008 third quarter earnings were $0.28 per share, an increase of 17 percent over prior earnings of $0.24 per share.

Total revenue for the third quarter was a record $1.61 billion, an increase of $50 million, or 3.2 percent, over $1.56 billion in the third quarter 2007. Higher revenue for the quarter benefited from a 7.6 percent increase in average price, of which 370 basis points were associated with the company’s fuel recovery fee, partially offset by a 4.4 percent decrease in volumes. Lower volumes for the quarter primarily reflect the impact of United States economic conditions.

Third quarter operating income before depreciation and amortization, loss from divestitures and asset impairments, or EBITDA, inclusive of $12.5 million of merger-related costs, increased 4.4 percent to $452.1 million, compared with $433.1 million last year. Reported EBITDA for the quarter as a percentage of revenue increased 20 basis points to 28.1 percent, compared with 27.9 percent for the same period last year. Merger-related costs reduced EBITDA as a percentage of revenue for the quarter by 0.8 percent.

For the third quarter, operating costs as a percentage of revenue dropped 60 basis points as the company continued to benefit from strong pricing, combined with a number of internal initiatives to lower expenses and to drive greater efficiencies throughout its operations. EBITDA margins for the quarter also reflect the positive impact of company actions to reduce SG&A expenses, which declined as a percentage of revenue to 9.7 percent from 10.1 percent last year.

Cash flow from operations in the third quarter 2008 was $281.3 million, compared with $284.2 million in the comparable quarter last year. Free cash flow for the third quarter was $144.7 million, compared with prior year free cash flow of $168.8 million reflecting slightly higher capital expenditures in the third quarter of 2008.