Volatile stock to watch: Advanced Disposal Services Inc (NYSE: ADSW)

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Advanced Disposal Services Inc (NYSE: ADSW) stock lost over 0.03% on 20th February, 2020 (Source: Google finance) after the company posted lower than expected results for the fourth quarter of FY 19. The company has reported the net loss during fourth quarter 2019 was ($3.2) million and adjusted net income, which excludes certain gains and expenses, of $7.5 million. The company has achieved fourth quarter and full year average yield of 3.3%. In the fourth quarter, the organic volume has fallen 2.2% on the back of lower disposal tonnage and full year organic volume was flat. The company’s year-over-year growth from acquisitions was 1.4% for the fourth quarter and full year 2019. The company has achieved the adjusted EBITDA of $103.7 million for the fourth quarter, which included a $9.4 million year-over-year headwind related to our recycling business and higher disposal facility costs.  Those costs were partially offset by a $4.5 million benefit from CNG fuel tax credits. Further, the company has reported full year revenue of $1,623.0 million, which reflects an increase of 4.2% overall versus the prior year. The company has generated the full year cash provided by operating activities of $280.2 million and achieved the full year adjusted free cash flow of $136.8 million

ADSW in the fourth quarter of FY 19 has reported the adjusted earnings per share of 8 cents, missing the analysts’ estimates for the adjusted earnings per share of 15 cents, according to analysts surveyed by Zacks Investment Research. The company had reported the adjusted revenue growth of 1.4 percent to $400.5 million in the fourth quarter of FY 19, missing the analysts’ estimates for revenue of $413.6 million.

Meanwhile, the company will be acquired by wholly-owned subsidiary of Waste Management, Inc. in an all-cash transaction, and ADSW has to be de-listed from the New York Stock Exchange and de-registered under the Securities Exchange Act of 1934, as amended. Waste Management is acquiring all outstanding shares of Advanced Disposal for $33.15 per share in cash, for a total enterprise value of $4.9 billion when including approximately $1.9 billion of Advanced Disposal’s net debt. This acquisition stands as a testament to the strength of the Advanced Disposal business and brings together two strong waste management teams with extensive environmental services expertise. Waste Management is North America’s premier environmental solutions company. Advanced Disposal had strong waste network, that includes 94 collection operations, 73 transfer stations, 41 landfills, and 22 owned or operated recycling facilities.

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