Operating income increased $18.2 million in fourth quarter 2016 versus prior year and company is well positioned to generate strong operating cash flows in 2017
Ponte Vedra, Fla.
Advanced Disposal Services, Inc. (NYSE: ADSW), (d/b/a Advanced Disposal)
announced today revenue for the three months ended December 31, 2016 of $352.0 million versus $349.6 million in the same
period of the prior year. Net loss during fourth quarter 2016 was $20.1 million, or $0.24 per share, versus a net loss of $8.8
million, or $0.14 per share, in fourth quarter 2015. The company achieved quarterly adjusted EBITDA and adjusted EBITDA
margins of $107.7 million and 30.6%, respectively, or an increase of $6.2 million in adjusted EBITDA and 160 basis points in
adjusted EBITDA margins versus fourth quarter 2015.
During the fourth quarter, the company completed its initial public offering, which raised nearly $375 million net of fees
between the initial share issuance and the underwriters exercising their option to purchase additional shares. Those proceeds
were used to repay debt, driving improvements in the company's leverage ratio. The company also received credit ratings
upgrades by both Standard & Poor's and Moody's.
Based on the momentum generated from the initial public offering and subsequent ratings upgrades, the company refinanced its
outstanding debt and credit facility in the fourth quarter. This debt refinancing coupled with the debt repayments from the
initial public offering is expected to save the company over $30 million in cash interest savings annually. A $64.7 million
pretax loss on debt extinguishments and modifications was recorded, which is the driver of the decline of fourth quarter net
income. However, fourth quarter adjusted net income, which includes an adjustment for the debt refinancing charge, was $17.2
million or an increase of $11.7 million versus fourth quarter 2015. Strong pricing was a key driver of the increase in adjusted
net income with average yield for the quarter of 2.7%. Additionally, the company benefited from the rollover impact of
accretive acquisitions exceeding lower margin divestitures.
For the full year ended December 31, 2016, revenue was $1,404.6 million versus $1,396.4 million for the prior year period.
Net loss improved $3.2 million to $30.4 million, and adjusted net income increased $17.6 million to $33.5 million.
Additionally, adjusted EBITDA of $411.1 million was $11.1 million better year-over-year, and adjusted EBITDA margins also
improved 70 basis points to 29.3%.
"Advanced Disposal has undergone transformational changes during 2016," said Richard Burke, CEO. "I am pleased we were
able to improve our capital structure and begin the next chapter of our company's history as a public company, while at the
same time producing strong results for both fourth quarter and the full year 2016. We were also able to continue to execute on
our strategy of entering vertically-integrated operations in secondary markets earlier this month by closing on the acquisition of
CGS Services, Inc. in Indiana. Overall, the combination of continued execution of our operating strategy, along with capital
structure improvements, positions us well to generate strong cash provided by operating activities in 2017."
Fiscal Year 2017 Guidance
Advanced Disposal's guidance is based on current economic conditions and does not assume any significant changes in the
overall economy during 2017. Please refer to the Special Note Regarding Forward-Looking Statements section of this press
? Revenue is estimated to be between $1,450 million and $1,475 million. This includes $25 million of revenue in 2017
related to the company's recently announced acquisition of CGS Services, Inc.
? Adjusted EBITDA is estimated to be between $423 million and $433 million.
? Capital expenditures are estimated to be between $171 million and $180 million.
? Adjusted free cash flow is estimated to be between $121 million and $141 million.
Advanced Disposal will conduct a quarterly earnings conference call on February 24, 2017 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 51793168 or
the Advanced Disposal Q4 2016 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.weiyunquan.tw.
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 in arriving at adjusted EBITDA and adjusted net income, are contained in the “Reconciliation of
Certain Non-GAAP Measures” section of this press release.