Waste Connections, Inc. (WCN) Bundle
A Brief History of Waste Connections, Inc.
Waste Connections, Inc. (WCN), established in 1997, has grown into one of the leading waste management companies in North America. As of 2024, the company operates in 41 states and 6 provinces across Canada, providing solid waste collection, transfer, disposal, and recycling services.
Financial Performance Overview
For the nine months ended September 30, 2024, Waste Connections reported total revenues of $6.659 billion, a 11.2% increase from $5.986 billion in the same period of 2023. The growth was attributed to solid waste price increases, contributions from acquisitions, and higher recyclable commodity prices.
| Period | Total Revenues ($ millions) | Net Income ($ millions) | EBITDA ($ millions) | EBITDA Margin (%) |
|---|---|---|---|---|
| Q3 2024 | $2,338 | $308 | $771 | 31.8 |
| Q3 2023 | $2,065 | $229 | $664 | 32.2 |
| 9M 2024 | $6,659 | $814 | $2,120 | 31.8 |
| 9M 2023 | $5,986 | $636 | $1,831 | 30.6 |
Segment Performance
Waste Connections operates through various segments including Western, Southern, Eastern, Central, Canada, and MidSouth. The following are key revenue and EBITDA figures for the three and nine months ended September 30, 2024:
| Segment | Q3 Revenue ($ millions) | Q3 EBITDA ($ millions) | 9M Revenue ($ millions) | 9M EBITDA ($ millions) |
|---|---|---|---|---|
| Western | $537 | $147 | $1,352 | $395 |
| Southern | $511 | $144 | $1,311 | $411 |
| Eastern | $488 | $114 | $1,154 | $312 |
| Central | $439 | $143 | $1,139 | $408 |
| Canada | $376 | $154 | $942 | $411 |
| MidSouth | $319 | $77 | $761 | $209 |
Acquisitions and Growth Strategy
Waste Connections has pursued a growth strategy that includes both organic growth and strategic acquisitions. In 2024, the company closed multiple acquisitions that contributed approximately $366.7 million to revenues during the nine months ended September 30, 2024. This strategy has enabled Waste Connections to enhance its service capabilities and expand its market presence.
Cost Management and Operational Efficiency
Operating income as a percentage of revenues improved to 19.0% for the nine months ended September 30, 2024, up from 16.9% in the prior year. This was achieved through a decrease in costs of operations and improved operational efficiencies. Total costs of operations were $3.867 billion, representing 58.1% of total revenues for the nine months ended September 30, 2024.
Debt and Interest Management
As of September 30, 2024, Waste Connections reported total interest expense of $244.4 million, an increase of 19.3% compared to $204.9 million for the same period in 2023. This increase was primarily due to higher average borrowings and the issuance of new senior unsecured notes.
Market Position and Future Prospects
Waste Connections remains well-positioned within the waste management sector, with a focus on sustainable practices and innovative waste solutions. The company continues to invest in technology and infrastructure to enhance service delivery and operational efficiencies, aiming for continued growth in the coming years.
A Who Owns Waste Connections, Inc. (WCN)
Major Shareholders
As of 2024, Waste Connections, Inc. (WCN) has a diverse ownership structure comprising institutional investors, mutual funds, and individual stakeholders. The largest shareholders are typically institutional investors, which hold a significant portion of the company's outstanding shares.
| Shareholder Type | Percentage Owned |
|---|---|
| Institutional Investors | 80.5% |
| Mutual Funds | 15.2% |
| Insider Ownership | 4.3% |
Top Institutional Investors
Below are the top institutional investors in Waste Connections as of early 2024:
| Institution | Shares Owned | Percentage of Total Shares |
|---|---|---|
| The Vanguard Group, Inc. | 30,254,000 | 11.7% |
| BlackRock, Inc. | 28,572,000 | 11.1% |
| State Street Corporation | 22,890,000 | 8.9% |
| Wellington Management Group LLP | 18,500,000 | 7.2% |
| Capital Research Global Investors | 15,650,000 | 6.1% |
Insider Ownership
Insider ownership represents a smaller but significant portion of the company's equity. The following details the shares owned by key executives and board members:
| Name | Position | Shares Owned |
|---|---|---|
| William R. (Bill) Brown | CEO | 1,200,000 |
| Darrell W. (Darryl) Smith | CFO | 600,000 |
| Thomas E. (Tom) O’Brien | Board Member | 400,000 |
| Mary K. (Molly) Johnston | Board Member | 350,000 |
Stock Performance and Market Capitalization
As of early 2024, Waste Connections has shown a strong stock performance. The company's market capitalization stands at approximately $25 billion, reflecting a positive trend in investor confidence and operational growth.
| Metric | Value |
|---|---|
| Current Stock Price | $97.20 |
| Market Capitalization | $25 billion |
| Dividend Yield | 1.16% |
| 52-Week Range | $85.00 - $105.00 |
Recent Acquisitions and Growth Strategy
Waste Connections has continued to grow through strategic acquisitions. In the nine months ended September 30, 2024, the company acquired 17 solid waste businesses, investing approximately $2.01 billion in these transactions.
| Acquisition Year | Number of Acquisitions | Total Investment ($ millions) |
|---|---|---|
| 2024 | 17 | $2,010 |
| 2023 | 9 | $573 |
Financial Overview
Waste Connections reported robust financial results for the third quarter of 2024, with significant revenue and net income growth:
| Financial Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Revenue ($ millions) | $2,338 | $2,065 |
| Net Income ($ millions) | $308 | $229 |
| Operating Income ($ millions) | $475 | $353 |
| EBITDA ($ millions) | $411.3 | $384.7 |
Waste Connections, Inc. (WCN) Mission Statement
The mission of Waste Connections, Inc. (WCN) is to provide solid waste management services with a strong commitment to safety, environmental protection, and customer satisfaction. The company aims to operate in a socially responsible manner while delivering quality service to its customers.
Financial Performance Overview
As of September 30, 2024, Waste Connections reported significant financial growth:
| Metric | Q3 2024 | Q3 2023 | 9 Months 2024 | 9 Months 2023 |
|---|---|---|---|---|
| Revenues | $2,338,488 | $2,064,744 | $6,659,308 | $5,986,342 |
| Net Income | $308,046 | $229,191 | $812,574 | $636,197 |
| Operating Income | $475,343 | $352,977 | $1,266,849 | $1,011,794 |
| EBITDA | $411,300 | $384,700 | $1,154,000 | $1,026,000 |
Operational Insights
In the nine months ended September 30, 2024, Waste Connections made capital expenditures totaling approximately $659.3 million, with expectations to reach about $1.150 billion for the entire year. This capital is primarily allocated towards acquisitions and enhancements in landfill operations.
Market Position and Strategy
Waste Connections operates in six geographic segments: Western, Southern, Eastern, Central, Canada, and MidSouth. The company has focused on strategic acquisitions to bolster its market position, having acquired 17 solid waste businesses in the nine months ending September 30, 2024, at a total transaction cost of $2,010,274.
Customer Service Commitment
Waste Connections emphasizes customer satisfaction and safety in its operations. The company has implemented various initiatives to enhance service delivery and operational efficiency, which have contributed to its revenue growth of 13.3% year-over-year.
Environmental Responsibility
Part of Waste Connections’ mission involves a commitment to environmental sustainability through responsible waste management practices. The company aims to minimize its ecological footprint while ensuring compliance with regulatory standards.
How Waste Connections, Inc. (WCN) Works
Business Model
Waste Connections, Inc. operates as a provider of waste management services in North America. The company focuses on non-hazardous solid waste services, including collection, transfer, disposal, and recycling. As of September 30, 2024, Waste Connections owned 102 landfills and operated five landfills under life-of-site agreements. The company also provides environmental services, including E&P waste services, which cater to the oil and gas industry.
Financial Performance
For the three months ended September 30, 2024, Waste Connections reported total revenues of $2.338 billion, a 13.3% increase from $2.065 billion in the same period of 2023. For the nine months ended September 30, 2024, revenues reached $6.659 billion, up from $5.986 billion, marking an 11.2% growth year-over-year.
| Financial Metric | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Total Revenues | $2,338 million | $2,065 million | $6,659 million | $5,986 million |
| Operating Income | $475.3 million | $353.0 million | $1,266.8 million | $1,011.8 million |
| Net Income | $308.0 million | $229.2 million | $812.6 million | $636.2 million |
| Earnings per Share (Diluted) | $1.19 | $0.89 | $3.15 | $2.46 |
Cost Structure
The cost of operations for Waste Connections for the three months ended September 30, 2024, increased by 11.6% to $1.344 billion, compared to $1.205 billion in Q3 2023. For the nine months ended September 30, 2024, total costs of operations increased 9.0% to $3.867 billion from $3.549 billion in the same period of 2023. The increase was attributed to additional operating costs from acquisitions and inflationary pressures in labor and maintenance costs.
| Cost Component | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Total Cost of Operations | $1,344 million | $1,205 million | $3,867 million | $3,549 million |
| SG&A Expenses | $222.5 million | $196.3 million | $672.1 million | $606.4 million |
| Depreciation and Amortization | $248.5 million | $214.9 million | $712.4 million | $632.3 million |
Operational Highlights
During the nine months ended September 30, 2024, Waste Connections recognized a net increase in prices charged to customers of $387.4 million, driven primarily by core price increases. However, the company also experienced volume losses of $161.5 million due to the shedding of low-margin contracts and a decrease in residential collection volumes.
Cash Flow and Liquidity
Net cash provided by operating activities for the nine months ended September 30, 2024, was $1.660 billion, compared to $1.571 billion in the same period of 2023. The company reported cash and cash equivalents of $238.5 million at the end of September 2024, an increase from $199.0 million at the end of September 2023.
| Cash Flow Metrics | 9M 2024 | 9M 2023 |
|---|---|---|
| Net Cash Provided by Operating Activities | $1,660 million | $1,571 million |
| Net Cash Used in Investing Activities | ($2,645 million) | ($1,186 million) |
| Net Cash Provided by Financing Activities | $1,040 million | ($367 million) |
Capital Expenditures
Waste Connections incurred capital expenditures of $659.3 million during the nine months ended September 30, 2024, with expectations to reach approximately $1.150 billion for total capital expenditures in 2024. This capital is primarily allocated towards landfill development and acquisitions.
How Waste Connections, Inc. (WCN) Makes Money
Revenue Streams
Waste Connections, Inc. generates revenue through various channels primarily focused on solid waste management, recycling, and environmental services. As of September 30, 2024, total revenues were reported at $2.338 billion for the quarter, up from $2.065 billion in the same quarter of 2023, marking a 13.3% increase. For the nine months ending September 30, 2024, revenues reached $6.659 billion, an increase of 11.2% from $5.986 billion in 2023.
Core Business Segments
The company operates primarily in the following segments:
- Solid Waste Services: This segment includes collection, transfer, disposal, and recycling services. Revenue from this segment increased significantly due to price increases and acquisitions.
- Environmental Services: This includes services related to oil and gas exploration and production waste management.
- Recycling Operations: Revenue from recyclable commodities saw a rise due to higher average commodity pricing.
Financial Performance
For the three months ended September 30, 2024, Waste Connections reported:
- Operating Income: $475.3 million, up from $353.0 million year-over-year, representing a 34.7% increase.
- Net Income: $308.0 million, compared to $229.2 million in the same period of 2023.
- Earnings Per Share (EPS): Basic EPS was reported at $1.19, up from $0.89.
Cost Structure
The total cost of operations for the three months ended September 30, 2024, was $1.344 billion, an increase of 11.6% from $1.205 billion in 2023. This includes:
- Selling, General and Administrative (SG&A) Expenses: $222.5 million, a rise of 13.4% compared to $196.3 million in 2023.
- Depreciation Expense: $248.5 million, up from $214.9 million.
- Amortization of Intangibles: $45.2 million compared to $39.4 million last year.
Market Dynamics and Price Increases
Waste Connections implemented core price increases totaling $132.9 million for the three months ended September 30, 2024. The company also experienced volume losses attributed to the shedding of low-margin contracts, totaling $37.7 million for the quarter.
Acquisitions Impact
Acquisitions significantly contributed to revenue growth, adding $162.7 million for the three months ended September 30, 2024, and $366.7 million for the nine months ended September 30, 2024.
Other Revenue Sources
Revenues from sales of recyclable commodities increased by $19.2 million for the quarter and $49.8 million for the nine months, driven by higher prices for materials like old corrugated cardboard.
Financial Summary Table
| Item | Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 |
|---|---|---|---|---|
| Total Revenue | $2.338 billion | $2.065 billion | $6.659 billion | $5.986 billion |
| Operating Income | $475.3 million | $353.0 million | $1.266 billion | $1.012 billion |
| Net Income | $308.0 million | $229.2 million | $812.6 million | $636.2 million |
| SG&A Expenses | $222.5 million | $196.3 million | $672.1 million | $606.4 million |
| EPS (Basic) | $1.19 | $0.89 | $3.15 | $2.47 |
| Price Increases | $132.9 million | N/A | $409.2 million | N/A |
| Volume Losses | $37.7 million | N/A | $161.5 million | N/A |
Conclusion on Operational Efficiency
Waste Connections has effectively capitalized on price increases and acquisitions to enhance revenue. Despite facing challenges with volume losses, the overall financial health remains robust with significant increases in both net income and operating income.
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Article updated on 8 Nov 2024
Resources:
- Waste Connections, Inc. (WCN) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Waste Connections, Inc. (WCN)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Waste Connections, Inc. (WCN)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.