Waste Connections' Q4 financial report shows revenue increase of 16.2 percent
Waste Connections has released its results for the fourth quarter of 2021 and its outlook for 2022.
"The year ended on a high note, as strong solid waste organic growth and acquisition activity, along with continuing underlying margin expansion, drove Q4 financial results once again above expectations. We are also extremely pleased with our results for the full year, as adjusted EBITDA margin expanded 70 basis points. Moreover, we delivered 20 percent growth in adjusted free cash flow to $1.010 billion, in spite of capital expenditures up 25 percent, as we continued to reinvest in and grow our business," said Worthing F. Jackman, President and Chief Executive Officer.
"Acquisition activity accelerated in the fourth quarter, resulting in approximately $400 million in acquired annualized revenues in 2021 and setting up acquisition contribution approaching 6 percent in 2022, including transactions completed year to date. Along with solid waste pricing growth of about 6.5 percent, this already positions us for double-digit percentage growth in revenue, adjusted EBITDA and adjusted free cash flow in 2022. Additional acquisitions expected to be completed during the year, improvement in commodity-driven revenues and E&P waste activity, or moderation of inflationary trends would provide incremental benefit."
Q4 2021 results
- Revenue in the fourth quarter totaled $1.624 billion, up from $1.398 billion in the year ago period.
- Operating income was $249.3 million, which included $28.4 million primarily related to impairments and other acquisition-related costs. This compares to operating income of $197.1 million in the fourth quarter of 2020, which included $29.0 million primarily related to impairments and other acquisition-related costs.
- Net income in the fourth quarter was $166.3 million, or $0.64 per share on a diluted basis of 261.3 million shares. In the year ago period, the company reported net income of $130.7 million, or $0.50 per share on a diluted basis of 263.6 million shares.
- Adjusted net income in the fourth quarter was $217.1 million, or $0.83 per diluted share, versus $178.6 million, or $0.68 per diluted share, in the prior year period.
- Adjusted EBITDA in the fourth quarter was $495.4 million and 30.5 percent of revenue, as compared to $426.6 million and 30.5 percent of revenue in the prior year period.
Full year 2021 results
For the year ended December 31, 2021, revenue was $6.151 billion, up from $5.446 billion in the year ago period. Operating income, which included $32.3 million in impairments and other operating items, $11.3 million in acquisition-related costs, and $8.4 million in fair value accounting changes to equity awards, was $1.040 billion, as compared to operating income of $412.4 million for the same period in 2020, which included $482.1 million in costs primarily related to impairments and other operating items.
Net income in 2021 was $618.0 million, or $2.36 per share on a diluted basis of 261.7 million shares. In the year ago period, the Company reported net income of $204.7 million, or $0.78 per share on a diluted basis of 263.7 million shares.
Adjusted net income in 2021 was $846.6 million, or $3.23 per diluted share, compared to $695.8 million, or $2.64 per diluted share, in the year ago period. Adjusted EBITDA in 2021 was $1.919 billion and 31.2 percent of revenue, up from $1.662 billion and 30.5 percent of revenue in the prior year period.
Outlook for 2022
Waste Connections also announced its outlook for 2022, which assumes no change in the current economic environment.
- Revenue is estimated at approximately $6.875 billion;
- Net income is estimated at approximately $846 million;
- Adjusted EBITDA is estimated at approximately $2.145 billion, or about 31.2 percent of revenue;
- Net cash provided by operating activities is estimated at approximately $2.0 billion;
- Capital expenditures are estimated to be approximately $850 million;
- Adjusted free cash flow is estimated at approximately $1.150 billion, or 16.7 percent of revenue;
- Fully diluted share count is estimated at 259.0 million.