01—Abstract
Summary
Summary of the 10-Q filed April 24, 2013. Cited figures are marked; the original filing is the authoritative source.
Waste Management, Inc. (WM) reported revenues of $3.34 billiona for the first quarter of 2013, a slight increase of 1.2% compared to the prior year, largely driven by acquisitions, particularly the recent purchase of Greenstar, and improved pricing (yield) in collection and disposal services.
Despite revenue growth, net income attributable to Waste Management, Inc. decreased slightly to $168 millionb ($0.36 per diluted share) from $171 million ($0.37 per diluted share) in the first quarter of 2012. The company's operational efficiency saw mixed results. While selling, general, and administrative expenses decreased due to restructuring efforts, operating expenses rose due to the Greenstar acquisition.
The company also incurred $15 millionc in pre-tax impairment charges and $8 million in restructuring charges, which negatively impacted earnings per share by $0.03 and $0.01 respectively. Free cash flow significantly improved to $348 million from $102 million in the prior year period, bolstered by lower capital expenditures and a significant decrease in bonus payments.
Looking ahead, WM is focused on revenue growth through customer segmentation and acquisitions, cost control, and investment in new technologies. The company's financial performance reflects a steady operational execution, with a focus on extracting value from waste streams and managing costs effectively amidst a competitive market and fluctuating commodity prices.
02—Key points
Key Highlights
- Total revenues for Q1 2013 increased by 1.2% to $3.34 billion, primarily driven by acquisitions (notably Greenstar) and positive yield on collection and disposal services.
- Net income attributable to Waste Management, Inc. saw a slight decrease to $168 million ($0.36/share) from $171 million ($0.37/share) in Q1 2012.
- Selling, General, and Administrative (SG&A) expenses decreased by 4.2% due to restructuring and cost control initiatives.
- Operating expenses increased by 2.0% largely due to the acquisition of Greenstar, impacting cost of goods sold and labor.
- Free cash flow improved significantly to $348 million from $102 million in the prior year, attributed to lower capital expenditures and reduced bonus payments.
- The company incurred $15 million in impairment charges and $8 million in restructuring charges, negatively impacting EPS.
- Capital expenditures decreased by $113 million year-over-year, reflecting a focus on spending management and timing differences.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2013, Waste Management Inc kept $0.05.
- Revenue$3.34B100.0%
- Cost of revenue−$2.21B66.2%
- Gross profit$1.13B33.8%
- Operating costs−$725.0M21.7%
- Operating income$402.0M12.1%
- Interest, other & tax−$234.0M7.0%
- Net income$168.0M5.0%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2013filed April 24, 2013Financial Statements
Q1 FY2013 against Q1 FY2012
| Line item | Q1 FY2013Q1 FY2012 | Change |
|---|---|---|
| Revenue | $3.34B$3.29B | +1.2% |
| Cost of Revenue | $2.21B$2.17B | +2.0% |
| Gross Profit | $1.13B$1.13B | −0.2% |
| SG&A Expenses | $390.00M$407.00M | −4.2% |
| Operating Expenses | $2.93B$2.89B | +1.4% |
| Operating Income | $402.00M$401.00M | +0.2% |
| Net Income | $168.00M$171.00M | −1.8% |
| EPS (Basic) | $0.36$0.37 | −2.7% |
| EPS (Diluted) | $0.36$0.37 | −2.7% |
| Shares Outstanding (Basic) | 465.70M462.10M | +0.8% |
| Shares Outstanding (Diluted) | 466.50M463.40M | +0.7% |
05—Questions
Frequently Asked Questions
What was the primary driver of revenue growth in the first quarter of 2013?
Revenue growth was primarily driven by acquisitions, particularly the recent acquisition of Greenstar, and positive revenue growth from yield on collection and disposal operations.
How did the acquisition of Greenstar impact the company's financial results?
The Greenstar acquisition contributed $25 million in revenues and $3 million in net losses in the first quarter of 2013. It also increased operating expenses by $24 million, primarily in cost of goods sold and labor, but was offset by related revenue increases.
What is the company's outlook and strategic focus?
Waste Management's strategic priorities include pursuing revenue growth through customer focus and acquisitions, emphasizing cost control and technology investment, and investing in emerging technologies that offer alternatives to traditional disposal and extract more value from waste streams.
How did free cash flow change compared to the previous year?
Free cash flow significantly improved to $348 million in the first quarter of 2013, compared to $102 million in the first quarter of 2012. This improvement was mainly due to a decrease in capital expenditures and lower bonus payments in the current quarter.
06—Continue