Advanced Disposal Services South, Inc. (NYSE:ADSW) Q3 2018 Earnings Conference Call Transcript

Nov 01, 2018 • 10:00 am ET

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Advanced Disposal Services South, Inc. (NYSE:ADSW) Q3 2018 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good morning. My name is Meghan, and I will be your conference operator today. At this time, I would like to welcome everyone to the Advanced Disposal Q3 2018 Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (Operator Instructions) Thank you.

Matthew Nelson, VP of Finance and IR, you may begin your conference.

Executive
Matthew Nelson

Good morning, everyone. We would like to welcome you to the Advanced Disposal Q3 2018 earnings call. With me today is Richard Burke, our CEO; Steve Carn, our CFO; and other members of senior management. We issued our press release yesterday with our results and trust that you've had a chance to review it. If you need a copy of the release, you may find it on our website or at www.sec.gov.

In today's earnings release and during the conference call, we are providing adjusted financial information, including adjusted EBITDA, adjusted free cash flow and adjusted net income, all of which are defined in our press release and exclude certain items that management believes are not indicative of our results of operations. This information is provided to enable you to make meaningful comparisons of the Company's operating performance between years and to view the Company's business from the same perspective as management. The earnings release contains exhibits that reconcile the differences between the non-GAAP measures and the comparable measures calculated in accordance with US GAAP.

(Forward-Looking Cautionary Statements)

This call is being recorded and will be available two hours after the conclusion of the call for 30 days. Time sensitive information provided during today's call may no longer be accurate at the time of the replay. Any redistribution, retransmission or rebroadcast of this call in any form without the express written consent of Advanced Disposal is prohibited.

I would now like to turn the call over to our CEO, Richard Burke.

Executive
Richard Burke

Thanks, Matt. Good morning, and I want to thank everyone for joining us today. Third quarter 2018 yielded solid results, highlighted by disciplined, price-led revenue growth and improving free cash flow, resulting in continued deleveraging as we benefit from strong industry fundamentals.

Starting with the topline; revenue grew 2% or 4.2% excluding the impact of the adoption of the revenue recognition standard. Average yield of 4.3% for the quarter was the main driver of the revenue gains, as we continued to match our pricing strategy with overall macroeconomic conditions. This brings year-to-date average yield to 3.2%, and we expect favorable pricing trends for the remainder of 2018 and into 2019, as we benefit both from the rollover impact of pricing actions taken this year, along with CPI in excess of 2%.

Turning to volume; our collection business showed good growth overall, with service increases outpacing decreases and residential volume benefiting from a large municipal contract that began in late 2017. Volume in total, however, declined 1.1%. This decline was expected and was primarily due to difficult prior year special waste comps.