AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 21, 1999
REGISTRATION STATEMENT NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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WASTE INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
NORTH CAROLINA 56-0954929
<S> <C>
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
</TABLE>
3949 BROWNING PLACE
RALEIGH, NORTH CAROLINA 27609
(919) 782-0095
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
---------------
STEPHEN C. SHAW
VICE PRESIDENT, FINANCE
WASTE INDUSTRIES, INC.
3949 BROWNING PLACE
RALEIGH, NORTH CAROLINA 27609
(919) 782-0095
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
COPIES TO:
<TABLE>
<S> <C>
DONALD R. REYNOLDS, ESQ.
WYRICK ROBBINS YATES & PONTON LLP
4101 LAKE BOONE TRAIL, SUITE 300
RALEIGH, NORTH CAROLINA 27607
(919) 781-4000
FAX (919) 781-4865
</TABLE>
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APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after this registration statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
---------------
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
TITLE OF EACH CLASS PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
OF SECURITIES TO AMOUNT TO BE OFFERING PRICE AGGREGATE OFFER- REGISTRATION
BE REGISTERED REGISTERED PER SHARE (1) ING PRICE (1) FEE
<S> <C> <C> <C> <C>
Common Stock,
no par value per share .. 486,723 shares $ 15.63 $ 7,607,480.49 $ 2,114.88
</TABLE>
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(1) Estimated solely for the purpose of calculating the registration fee, based
upon the average of the high and low prices of the Common Stock on the
Nasdaq National Market on May 18, 1999, in accordance with Rule 457.
---------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE>
The information in this prospectus is not complete. It might change. We
cannot sell these securities until the registration statement that we have
filed with the SEC is effective. This prospectus is not an offer to sell, nor
does it solicit offers to buy, these securities in any state where the offer or
sale is not permitted.
SUBJECT TO COMPLETION, DATED MAY 21, 1999
486,723 SHARES
[LOGO]
WASTE INDUSTRIES, INC.
COMMON STOCK
----------------
The shareholders of Waste Industries, Inc. ("Waste Industries") listed
below (the "Selling Shareholders") are offering and selling 486,723 shares of
Waste Industries common stock under this prospectus. Waste Industries will not
receive any proceeds from the sale of the shares. However, we will pay
substantially all of the expenses of this offering, estimated at approximately
$33,000. See "Selling Shareholders."
Our common stock is traded on the Nasdaq National Market under the symbol
"WWIN." On May 18, 1999, the last sale price of our common stock on the Nasdaq
National Market was $15.63 per share.
The Selling Shareholders may offer the shares through public or private
transactions, on or off the Nasdaq National Market, at prevailing market prices
or at privately negotiated prices. See "Plan of Distribution."
INVESTING IN OUR COMMON STOCK INVOLVES RISKS. SEE "RISK FACTORS" (PAGE 5).
----------------
NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR
DISAPPROVED OUR SECURITIES OR DETERMINED THAT THIS PROSEPCTUS IS TRUTHFUL OR
COMPLETE. IT IS ILLEGAL FOR ANYONE TO TELL YOU OTHERWISE.
THE DATE OF THIS PROSPECTUS IS , 1999.
<PAGE>
AVAILABLE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission (the "SEC"). You may
read and copy any document we file at the SEC's public reference rooms in
Washington, D.C., New York, New York and Chicago, Illinois. Please call the SEC
at 1-800-SEC-0330 for further information on the public reference rooms. Our
SEC filings are also available to the public from our web site at the SEC's web
site at "http:/www.sec.gov."
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and information that we file later
with the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings we
will make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"):
1. Annual Report on Form 10-K for the year ended December 31, 1998.
2. Quarterly Report on Form 10-Q for the quarter ended March 31, 1999.
3. Our Proxy Statement dated April 30, 1999 for our Annual Meeting to be
held on May 26, 1999.
4. The description of our Common Stock contained in our registration
statement pursuant to Section 12 of the Exchange Act, as amended from time to
time.
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
Trish Mueller
Investor Relations
Waste Industries, Inc.
3949 Browning Place
Raleigh, North Carolina 27609
(919) 782-0095
This prospectus is part of a registration statement we filed with the SEC.
You should rely only on the information or representations provided in this
prospectus. We have authorized no one to provide you with different
information. We are not making an offer of these securities in any state where
the offer is not permitted. You should not assume that the information in this
prospectus is accurate as of any date other than the date on the front of the
document.
2
<PAGE>
OUR COMPANY
Waste Industries is a regional, integrated provider of solid waste
services. We operate primarily in North Carolina, South Carolina, Virginia,
Tennessee, Mississippi, Alabama, Georgia and Florida, providing solid waste
collection, transfer, recycling, processing and disposal services for
commercial, industrial, municipal and residential customers. We operate 22
transfer stations, over 100 county convenience drop-off centers, seven recycling
facilities and four landfills through our 40 branches in the Southeastern U.S.
We had revenues of $171.3 million and operating income of $20.1 million in the
year ended December 31, 1998, and revenues of $129.2 million and operating
income of $13.3 million in the year ended December 31, 1997. We believe that the
$42.1 million, or 32.6%, increase in revenues and $6.8 million, or 51.1%,
increase in operating income are primarily attributable to our success in
executing our growth and operating strategies.
Our presence in high-growth markets in the Southeastern U.S., including
North Carolina, Georgia and Florida, has supported our internal growth. Since
1990, we have acquired 43 solid waste disposal operations. Current levels of
population growth and economic development in the Southeastern U.S. and our
strong market presence in the region should provide us an opportunity to
increase our revenues and market share. As we add customers in existing markets,
our density should improve, which we expect will increase our collection
efficiencies and profitability.
Our objective is to build the premier solid waste services company in the
Southeastern U.S. Our strategy for achieving our objective includes:
o generating internal growth by adding customers and services to our
existing operations;
o acquiring solid waste collection companies in existing and new areas of
our target market; and
o increasing operating efficiencies to enhance profitability of existing
and acquired operations.
RECENT DEVELOPMENTS
In April 1999, we acquired Old Kings Road Solid Waste, Inc., which
operates a landfill and a related solid waste collection business in and around
Jacksonville, Florida, for approximately $1.0 million in cash. This acquisition
gives us a fourth landfill and expands our operations into northeastern
Florida, a new market for us in the Southeastern U.S.
On April 30, 1999, we also made a tuck-in acquisition for approximately
$0.5 million in cash. This tuck-in acquisition further expands our existing
operations in and around Atlanta, Georgia.
On May 1, 1999, we acquired North Mecklenburg Sanitation, Inc., which
operates a solid waste collection business in and around Charlotte, North
Carolina. The purchase price for this company was approximately $2.0 million in
cash and 281,250 unregistered shares of our common stock with registration
rights. This transaction expands our operations into the Charlotte area.
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<PAGE>
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements contained in this prospectus discuss our plans and
strategies for our business and are "forward-looking statements" as that term
is defined in the Private Securities Litigation Reform Act. The words
"anticipates," "believes," "estimates," "expects," "plans," "intends" and
similar expressions are meant to identify these statements as forward-looking
statements, but they are not the exclusive means of identifying them. The
forward-looking statements in this prospectus reflect the current views of our
management; however, various risks, uncertainties and contingencies could cause
our actual results, performance or achievements to differ materially from those
expressed in or implied by these statements, including:
o the success or failure of our efforts to implement our business strategy
o the other factors discussed in the "Risk Factors" section and elsewhere
in this prospectus
We assume no obligation to update publicly any forward-looking statements,
whether as a result of new information, future events or otherwise. For a
discussion of important risks of an investment in our common stock, including
factors that could cause actual results to differ materially from results
referred to in the forward-looking statements, see the "Risk Factors" section
of this prospectus. In light of the risks and uncertainties discussed in "Risk
Factors" and elsewhere in this prospectus, events referred to in
forward-looking statements in this prospectus might not occur.
4
<PAGE>
RISK FACTORS
YOU SHOULD BE AWARE THAT THERE ARE VARIOUS RISKS TO AN INVESTMENT IN OUR
COMMON STOCK, INCLUDING THOSE DESCRIBED BELOW. YOU SHOULD CAREFULLY CONSIDER
THESE RISK FACTORS, TOGETHER WITH ALL OF THE OTHER INFORMATION INCLUDED IN THIS
PROSPECTUS, BEFORE YOU DECIDE TO INVEST IN SHARES OF OUR COMMON STOCK.
IF ANY OF THE FOLLOWING RISKS, OR OTHER RISKS NOT PRESENTLY KNOWN TO US OR
THAT WE CURRENTLY BELIEVE TO NOT BE SIGNIFICANT, DEVELOP INTO ACTUAL EVENTS,
THEN OUR BUSINESS, FINANCIAL CONDITION, RESULTS OF OPERATIONS OR PROSPECTS
COULD BE MATERIALLY ADVERSELY AFFECTED. IF THAT HAPPENS, THE MARKET PRICE OF
OUR COMMON STOCK COULD DECLINE, AND YOU MAY LOSE ALL OR PART OF YOUR
INVESTMENT.
WE MAY BE UNABLE TO MANAGE OUR GROWTH.
Our goal is to increase the size of our operations both through internal
growth and acquisition of other solid waste companies. As we pursue this goal,
we may experience periods of rapid growth that could strain our management, as
well as our operational, financial and other resources. In order to maintain
and manage our growth effectively, we will need to expand our management
information systems capabilities and improve our operational and financial
systems and controls. As we grow, our staffing requirements will increase
significantly. We will need to attract, train, motivate, retain and manage our
senior managers, technical professionals and other employees. We might not be
able to find and train qualified personnel, or do so on a timely basis, or
expand our operations and systems to the extent, and in the time, required.
WE MAY BE UNABLE TO EXECUTE OUR ACQUISITION GROWTH STRATEGY.
Our growth strategy envisions that a substantial part of our future growth
will come from acquiring solid waste companies and integrating their operations
into our existing business. Our success in executing our growth strategy
depends, in part, on our ability to identify and acquire desirable acquisition
candidates, as well as our ability to successfully integrate the acquired
companies' operations into our business. The consolidation of our operations
with the operations of companies we acquire, including the integration of
systems, procedures, personnel and facilities, the relocation of staff and the
achievement of anticipated cost savings, economies of scale and other business
efficiencies, presents significant challenges to our management, particularly
if several acquisitions occur at the same time. In short, we cannot assure you
that:
o we will be able to identify desirable acquisition candidates;
o we will be able to acquire any of the identified candidates;
o we will effectively integrate the companies we acquire and fully realize
expected costs savings, economies of scale or business efficiencies; or
o any acquisitions will be profitable or increase our earnings.
Additional factors may negatively affect our ability to implement our
growth strategy. The recent consolidation and integration activity in our
industry, combined with the difficulties, uncertainties and expenses related to
developing landfills and transfer stations, has increased competition among
companies like ours that are looking to grow by acquiring existing solid waste
companies in addition, or as an alternative, to developing new operations of
their own. Also, many
5
<PAGE>
of the companies we compete against for acquisition candidates are larger,
better-known companies with significantly greater capital resources than ours.
The intense competition of companies in our industry pursuing the same
acquisition candidates may result in fewer acquisition opportunities for us, as
well as less advantageous acquisition terms, including higher purchase prices.
Higher acquisition costs could increase our capital requirements, or they could
force us to reduce the scope of our acquisition growth strategy. Either outcome
could have a material adverse effect on our growth prospects, our financial
condition and results of operations and the market price of our common stock.
WE MAY BE UNABLE TO FINANCE OUR ACQUISITION GROWTH STRATEGY.
We anticipate that any future business acquisitions will be financed
principally through the issuance of shares of our common stock. The relative
attractiveness of our common stock to potential acquisition candidates will
thus be a significant factor in our ability to finance our acquisition growth
strategy as planned. If acquisition candidates are unwilling to accept shares
of our common stock for the sale of their businesses, we might be required to
offer more cash to acquisition candidates, and this would require us to draw
more on our available cash resources or borrowings under our credit facilities
to finance our acquisition growth strategy. To the extent that then available
cash or credit resources are insufficient to fund our acquisition requirements,
we would need additional equity and/or debt financing to provide the cash
needed to effect acquisitions as planned. In addition, once companies have been
acquired, ongoing maintenance of those companies, particularly those with
landfill operations, might require substantial capital expenditures. Our
existing capital resources, together with any additional capital resources that
we may be able to raise, if at all, on terms that are satisfactory to us, might
not be sufficient to meet the capital requirements of our acquisition growth
strategy.
WE OPERATE IN A HIGHLY COMPETITIVE INDUSTRY AND MAY BE UNABLE TO COMPETE
EFFECTIVELY.
Our industry is highly competitive and fragmented and requires substantial
labor and capital resources. Some of the markets in which we compete or will
likely compete are served by one or more large, national solid waste companies,
as well as by numerous regional and local solid waste companies of varying
sizes and resources, some of which have accumulated substantial goodwill in
their markets. Some of our competitors may also be better capitalized, have
better name recognition or be able to provide services at lower cost than Waste
Industries.
We also compete with counties, municipalities and solid waste districts
that maintain their own waste collection and disposal operations. These
municipal operators may have financial advantages over us because of their
access to user fees and similar charges, tax revenues and tax-exempt financing.
In each market in which we own or operate a landfill, we compete for solid
waste volume on the basis of disposal or "tipping" fees, geographical location
and quality of operations. Our ability to obtain solid waste volume for our
landfills may be limited by the fact that some major collection companies also
own or operate landfills to which they send their waste.
We compete for collection accounts primarily on the basis of price and the
quality of services. Our competitors might reduce the price of their services
in an effort to expand their market share. Also, we derive a substantial
portion of our revenues from services provided under municipal contracts. As is
generally the case in the industry, these contracts are subject to periodic
competitive
6
<PAGE>
bidding. Some of our competitors may be able to bid lower than us for these
contracts. We might not be able to obtain or retain any of these contracts.
We face intense competition not only to provide services to customers but
also to acquire other businesses within our target market. Some of our
competitors have adopted, and others are likely to adopt, a strategy like ours
to acquire and consolidate regional and local solid waste businesses. The solid
waste industry is constantly changing as a result of rapid consolidation. We
expect that increased consolidation in the industry will increase the
competitive pressures on our company.
As a result of all these factors, we may have difficulty competing
effectively.
BUSINESSES WE ACQUIRE MAY HAVE UNDISCLOSED LIABILITIES.
In pursuing our acquisition strategy, our investigations of acquisition
candidates might fail to discover certain undisclosed liabilities of the
acquisition candidates. If we acquire a business having undisclosed
liabilities, as a successor owner, we might be responsible for any of the
undisclosed liabilities. We typically try to limit our exposure by getting
indemnification from each seller of the acquired companies, and by deferring
payment of a portion of the purchase price as security for the indemnification.
We might not be able to obtain indemnification, or it might not be enforceable,
collectible or sufficient in amount, scope or duration to fully offset any
undisclosed liabilities.
OUR OPERATIONS ARE GEOGRAPHICALLY CONCENTRATED.
Our operations and customers are currently located primarily in North
Carolina, South Carolina, Virginia, Tennessee, Mississippi, Alabama, Georgia
and Florida, and our internal growth and acquisition strategies target these
and other markets in the Southeastern United States. Given our current focus on
the Southeastern United States, our results of operations are susceptible to
downturns in the general economy of the region, as well as to other factors
affecting the region, such as state regulations affecting the solid waste
services industry.
SEASONAL CHANGES AND ECONOMIC FLUCTUATIONS MAY ADVERSELY AFFECT OUR BUSINESS
AND OPERATIONS.
Our results of operations tend to vary seasonally, with the first quarter
of the year typically generating the least revenues, then higher revenues in
the second and third quarter, followed by a decline in the fourth quarter.
These seasonal changes reflect the fact that less waste is generated and
revenues decrease from project-based and other integrated waste services during
the fall and winter months, as well as operating difficulties associated with
bad weather in the winter months. Certain operating and other fixed costs stay
relatively constant throughout the calendar year, resulting in similar
seasonality of operating income.
Other factors might cause our results of operations to vary seasonally.
Our operations may be adversely affected by periods of bad weather at any time
during the year which could delay the collection and disposal of waste, reduce
the volume of waste generated or delay the construction or expansion of our
landfill sites and other facilities. In addition, our commercial and industrial
collection operations, and our landfills that accept construction and
demolition debris, may be adversely affected by periods of economic downturn or
declines in the construction industry.
7
<PAGE>
WE MAY INCUR CHARGES RELATED TO CAPITALIZED EXPENDITURES AND ADVANCES.
Under generally accepted accounting principles, we capitalize certain
expenditures and advances relating to acquisitions and landfill development
projects. As of March 31, 1999, we had capitalized approximately $1.3 million of
these expenditures and advances. We expense indirect acquisition costs, such as
executive salaries, general corporate overhead and public affairs and other
corporate services, as incurred. We charge against earning any unamortized
capitalized expenditures and advances (net of any portion we estimate will be
recoverable through sale or otherwise) relating to any operation that is
permanently shut down and any pending acquisition or landfill development
project that is not expected to be successfully completed. Thus we may incur
charges against earnings relating to capitalized expenditures and advances that
could materially and adversely affect our business, financial condition and
results of operations.
COMPLIANCE WITH ENVIRONMENTAL REGULATION MAY IMPEDE OUR GROWTH OR ADVERSELY
AFFECT OUR RESULTS OF OPERATIONS.
We might need to spend considerable time, effort and capital to keep our
facilities in compliance with federal, state and local requirements regulating
health, safety, environment, zoning and land use. In addition, some of our
waste operations that cross state boundaries could be adversely affected if the
federal government, or the state or locality in which these waste operations
are located, imposes discriminatory fees on, or otherwise limits or prohibits,
the transportation or disposal of solid waste. If environmental laws become
more stringent, our environmental capital expenditures and costs for
environmental compliance would increase. In addition, due to the possibility of
unanticipated events or regulatory developments, the amounts and timing of
future environmental expenditures could vary substantially from those we
currently anticipate. Because of the nature of our operations, we could be
named as a potentially responsible party in connection with the investigation
or remediation of environmental conditions. These investigations might have a
material adverse effect on our financial condition or results of operations. A
significant judgment or fine against our company, or our loss of significant
permits or licenses, could have a material adverse effect on our financial
condition, results of operations or prospects.
Citizens' groups have become increasingly active in challenging the grant
or renewal of permits and licenses for landfills and other waste facilities.
Responding to any challenges presented by those citizens' groups may further
increase our costs and extend the time associated with establishing new
facilities and expanding existing facilities.
State and local governments, as well as citizens' groups, are increasingly
demanding alternatives to landfill disposal, such as recycling and composting.
In some of our markets, incineration is an alternative to landfill disposal.
State and local governments are increasingly mandating recycling and waste
reduction at the source, and prohibiting the disposal of certain types of
waste, such as yard waste, at landfills. These initiatives might result in
reduced waste volume in some of our markets. In addition, several states in our
market, including North Carolina, South Carolina and Virginia, have adopted
plans that set goals for recycling, specifying increasing percentages of
certain solid waste items to be recycled. These recycling goals are being
phased in over the next few years. Meeting them might have a material adverse
effect on our business, financial condition and results of operations.
8
<PAGE>
THERE ARE POTENTIAL ENVIRONMENTAL LIABILITY RISKS ASSOCIATED WITH OUR BUSINESS.
We are liable for any environmental damage that our solid waste facilities
and operations cause, including damage to neighboring landowners or residents,
particularly as a result of the contamination of soil, groundwater or surface
water, and especially drinking water. We might be liable for damage resulting
from conditions existing before we acquired these facilities. We might also be
liable for off-site environmental contamination caused by pollutants or
hazardous substances whose transportation, treatment or disposal was arranged
by us or our predecessors. Any substantial liability for environmental damage
could materially and adversely affect our business and financial results.
Each business that we acquire might have liabilities, including
liabilities that arise from prior owners' failure to comply with environmental
laws. As a successor owner, we may be legally responsible for these
liabilities. Even if we obtain legally enforceable representations, warranties
and indemnities from the sellers of the businesses we acquire, they might not
fully cover these liabilities. Some environmental liabilities, even if we do
not expressly assume them, might be imposed on us under various legal theories.
Our insurance program does not cover liabilities associated with any
environmental cleanup or remediation of our own sites. A successful uninsured
claim against us could materially and adversely affect our business and
financial results.
WE FACE LIMITATIONS ON LANDFILL PERMITTING AND EXPANSION.
We currently own and operate four landfills. Our ability to meet our
growth objectives may depend in part on our ability to acquire, lease and
expand landfills and develop new landfill sites. We may not be able to obtain
new landfill sites or expand the permitted capacity of our landfills when
necessary.
In some areas where we operate, suitable land for new sites or expansion
of existing landfill sites may be unavailable. Operating permits for landfills
in states where we operate must generally be renewed at least every five years.
It has become increasingly difficult and expensive to obtain required permits
and approvals to build, operate and expand solid waste management facilities,
including landfills and transfer stations. The process often takes several
years, requires numerous hearings and compliance with zoning, environmental and
other requirements, and is often resisted by citizen, public interest and other
groups. We might not be able to obtain or maintain the permits required to
expand, and the permits we get might contain burdensome terms and conditions.
Even when granted, final permits to expand are often not approved until the
remaining permitted disposal capacity of a landfill is very low. Local laws and
ordinances also might affect our ability to obtain permits to expand landfills.
If we were to exhaust our permitted capacity at a landfill, our ability to
expand internally would be limited, and we could be required to cap and close
that landfill and be forced to dispose of collected waste at more distant
landfills or at landfills operated by our competitors. The resulting increased
costs would materially and adversely affect our business and financial results.
WE MIGHT HAVE MATERIAL FINANCIAL OBLIGATIONS RELATING TO LANDFILL CLOSURE AND
POST-CLOSURE COSTS.
We currently accrue for landfill closure and post-closure costs based on
consumption of landfill airspace. As of December 31, 1998, assuming that all
available landfill capacity is used, we expect to expense approximately $1.7
million of landfill closure and post-closure costs over the remaining lives of
our landfill facilities. Our reserves for landfill and environmental costs
might not be adequate to cover the requirements of existing environmental
regulations, future changes or
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interpretations of existing regulations or the identification of adverse
environmental conditions previously unknown to us.
WE MIGHT BE UNABLE TO OBTAIN PERFORMANCE OR SURETY BONDS, LETTERS OF CREDIT OR
INSURANCE AS NEEDED.
Municipal solid waste services contracts and landfill closure obligations
might require us to obtain performance or surety bonds, letters of credit,
insurance or other means of financial assurance to secure our performance. Some
of our existing solid waste collection and recycling contracts require us to
obtain performance bonds, which we have obtained. In the future, if we are
unable to obtain performance or surety bonds or letters of credit in sufficient
amounts or at acceptable rates, we might not be able to enter into additional
municipal solid waste services contracts or obtain or retain landfill operating
permits. Any difficulty we encounter in obtaining insurance could also make it
more difficult for us to secure future contracts conditioned on our having
adequate insurance coverage. Our failure to obtain means of financial assurance
or adequate insurance coverage could materially and adversely affect our
business and financial results.
WE DEPEND ON KEY PERSONNEL.
Our success depends on the continued contributions of several key
employees and officers. Most of our officers do not have employment agreements
and we do not maintain key man life insurance policies on any of our officers.
The loss of the services of key employees and officers, whether such loss is
through resignation or other causes, or the inability to attract additional
qualified personnel, could have a material adverse effect on our financial
condition, results of operations and growth prospects.
MANAGEMENT CONTROLS OUR COMPANY.
As of March 31, 1999, our executive officers and directors as a group
beneficially owned 65.0% of our outstanding common stock. As a result, these
insiders, acting together, are able to control the election of directors and
the outcome of other matters submitted to shareholder vote.
POTENTIAL YEAR 2000 PROBLEMS MAY ADVERSELY AFFECT OUR BUSINESS.
We use computer software and related technologies throughout our business
that are likely to be affected by the date change in the year 2000. We might
not discover and remediate all potential problems with our systems in a timely
manner. In addition, computer software and related technologies used by our
customers, service providers, vendors and suppliers are likely to be affected
by the year 2000 date change. Failure of any of these parties to properly
process dates for the year 2000 and thereafter could result in unanticipated
expenses and delays to us, including delays in the payment by our customers for
services provided and delays in our ability to conduct normal banking
operations.
WE COULD ISSUE PREFERRED STOCK AND TAKE OTHER ACTIONS THAT MIGHT DISCOURAGE
THIRD PARTIES FROM ATTEMPTING TO ACQUIRE OUR COMPANY.
Our board of directors has the authority, without further action by the
shareholders, to issue up to 10,000,000 shares of preferred stock and to fix
the rights, preferences, privileges and restrictions, including voting rights,
of such shares. The rights of the holders of our common stock will be
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subject to, and might be adversely affected by, the rights of the holders of
any preferred stock that may be issued in the future. Issuing preferred stock
could have the effect of making it more difficult for a third party to acquire
a majority of our outstanding voting stock, thereby delaying, deferring or
preventing a change in control of our company. Also, the preferred stock may
have other rights, including economic rights, senior to our common stock, and
as a result, issuing preferred stock could have a material adverse effect on
the market value of our common stock.
WE DO NOT ANTICIPATE PAYING CASH DIVIDENDS ON OUR COMMON STOCK.
We intend to retain all earnings for the foreseeable future for funding
our business operations. In addition, our credit facilities restrict our
ability to declare and pay dividends on our common stock. Consequently, we do
not anticipate paying any cash dividends on our common stock to our
stockholders for the foreseeable future.
OUR STOCK PRICE MAY BE VOLATILE.
The price at which our common stock trades depends on a number of factors,
including:
o variations in our annual or quarterly financial results or our
competitors' annual or quarterly financial results;
o changes in research analysts' estimates of our earnings or our
competitors' earnings;
o conditions in the economy in general or our industry in particular;
o announcements by our company or our competitors;
o unfavorable publicity; or
o changes in applicable laws and regulations affecting us or our industry.
Some of these factors are beyond our control.
In addition, the stock market has from time to time experienced extreme
price and volume fluctuations. These broad market fluctuations might adversely
affect the market price of our common stock. You might not be able to resell
our common stock at a price equal to or higher than that at which you received
it.
11
<PAGE>
SELLING SHAREHOLDERS
The shares offered under this prospectus are being sold for the account of
the Selling Shareholders named in the following table. The table also contains
information regarding the Selling Shareholders' beneficial ownership of shares
of our common stock as of May 5, 1999, and as adjusted to give effect to the
sale of the shares.
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP BENEFICIAL OWNERSHIP
PRIOR TO OFFERING AFTER OFFERING
------------------------ -----------------------
NUMBER
NUMBER PERCENT OF SHARES NUMBER PERCENT
NAME OF SHARES OF CLASS TO BE SOLD OF SHARES OF CLASS
- ------------------------------------------ ----------- ---------- ------------ ----------- ---------
<S> <C> <C> <C> <C> <C>
Liberty Waste Services, LLC .............. 183,000 1.32% 183,000 -- --
James. M. Williamson ..................... 200,953 1.45% 200,953 -- --
Dwane J. Williamson ...................... 80,296 * 80,296 -- --
Greater Atlanta Sanitation, Inc. ......... 22,474 * 22,474 -- --
</TABLE>
- --------
* Less than one percent.
Waste Industries has entered into a relationship with Liberty Waste
Services, LLC ("Liberty") to jointly develop landfill-based waste disposal
operations in Tennessee, Kentucky and northern Mississippi over the next two
years. As part of our relationship with Liberty, we sold 183,000 shares of our
unregistered common stock to Liberty for $3.25 million. The price per share was
equal to closing price of our common stock on the Nasdaq National Market on the
day prior to the sale. When we sold the shares to Liberty, we granted Liberty
certain rights with respect to the registration for resale of those shares
under the Securities Act, and the shares are being registered under this
prospectus in accordance with those rights. Also in accordance with those
rights, we will pay substantially all of the expenses of this offering.
We issued an aggregate of 281,250 shares of our unregistered common stock
to James M. Williamson and Dwane J. Williamson on May 1, 1999, in connection
with our acquisition of North Mecklenburg Sanitation, Inc. We agreed to
register those shares and to pay substantially all of the expenses of offering
them under this prospectus.
We issued 22,474 shares of our unregistered common stock to Greater
Atlanta Sanitation, Inc. on August 28, 1998, in connection with our acquisition
of certain assets held by the company. We agreed to register those shares and
to pay substantially all of the expenses of offering them under this
prospectus.
12
<PAGE>
PLAN OF DISTRIBUTION
The Selling Shareholders may offer the shares at various times in one or
more of the following transactions:
o on the Nasdaq National Market;
o in the over-the-counter market;
o in transactions other than market transactions;
o in connection with short sales of Waste Industries shares;
o by pledge to secure debts or other obligations;
o in connection with the writing of non-traded and exchange-traded call
options, in hedge transactions and in settlement of other transactions in
standardized or over-the-counter options; or
o in a combination of any of the above.
The Selling Shareholders may sell shares at market prices then prevailing,
at prices related to prevailing market prices, at negotiated prices or at fixed
prices.
The Selling Shareholders may use broker-dealers to sell shares. If this
happens, broker-dealers will either receive discounts or commissions from the
Selling Shareholders, or they will receive commissions from purchasers of
shares for whom they have acted as agents.
LEGAL MATTERS
The validity of the issuance of the shares of Common Stock offered hereby
will be passed upon for the Company by Wyrick Robbins Yates & Ponton LLP,
Raleigh, North Carolina. As of the date hereof, partners in that firm
beneficially own 2,700 shares of Company Common Stock.
13
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO ONE (INCLUDING ANY SALESMAN OR BROKER) IS AUTHORIZED TO PROVIDE ORAL OR
WRITTEN INFORMATION ABOUT THIS OFFERING THAT IS NOT INCLUDED IN THIS
PROSPECTUS.
--------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Available Information 2
Our Company 3
Special Note Regarding Forward-Looking 4
Statements
Risk Factors 5
Selling Shareholders 12
Plan of Distribution 13
Legal Matters 13
</TABLE>
--------------------------------
486,723 SHARES
[LOGO]
WASTE INDUSTRIES, INC.
COMMON STOCK
--------------------------
PROSPECTUS
--------------------------
, 1999
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the estimated expenses payable by the
registrant in connection with the filing of this Form S-3 Registration
Statement:
<TABLE>
<S> <C>
Securities and Exchange Commission registration f$ 2,114.88
Printing costs ................................ 5,000.00
Legal fees .................................... 15,000.00
Accounting fees and expenses .................. 10,000.00
Miscellaneous expenses ........................ 885.12
-----------
Total ................................................... $ 33,000.00
===========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Registrant's Articles of Incorporation and Bylaws include provisions
to (i) eliminate the personal liability of its directors for monetary damages
resulting from breaches of their fiduciary duty to the fullest extent permitted
by Section 55-8-30(e) of the North Carolina Business Corporation Act (the
"Business Corporation Act"), and (ii) require the Registrant to indemnify its
directors and officers to the fullest extent permitted by Sections 55-8-50
through 55-8-58 of the Business Corporation Act, including circumstances in
which indemnification is otherwise discretionary. Pursuant to Sections 55-8-51
and 55-8-57 of the Business Corporation Act, a corporation generally has the
power to indemnify its present and former directors, officers, employees and
agents against expenses incurred by them in connection with any suit to which
they are, or are threatened to be made, a party by reason of their serving in
such positions so long as they acted in good faith and in a manner they
reasonably believed to be in, or not opposed to, the best interests of the
corporation, and with respect to any criminal action, they had no reasonable
cause to believe their conduct was unlawful. The Registrant believes that these
provisions are necessary to attract and retain qualified persons as directors
and officers. These provisions do not eliminate the directors' duty of care,
and, in appropriate circumstances, equitable remedies such as injunctive or
other forms of non-monetary relief will remain available under Business
Corporation Act. In addition, each director will continue to be subject to
liability for breach of the director's duty of loyalty to the Registrant, for
acts or omissions that the director believes to be contrary to the best
interests of the Registrant or its shareholders, for any transaction from which
the director deprived an improper personal benefit, for acts or omissions
involving a reckless disregard for the director's duty to the Registrant or its
shareholders when the director was aware or should have been aware of a risk of
serious injury to the Registrant or its shareholders, for acts or omissions
that constitute an unexcused pattern of inattention that amounts to an
abdication of the director's duty to the Registrant or its shareholders, for
improper transactions between the director and the Registrant and for improper
distributions to shareholders and loans to directors and officers. These
provisions do not affect a director's responsibilities under any other laws,
such as the federal securities laws or state or federal environmental laws.
The Registrant's Bylaws require the Registrant to indemnify its directors
and officers against expenses, judgments, fines, settlements and other amounts
actually and reasonably incurred (including expenses of a derivative action) in
connection with any proceeding, whether actual or threatened, to which any such
person may be made a party by reason of the fact that such person is or was a
director or officer of the Registrant or any of its affiliated enterprises,
provided such person acted in good faith and in a manner such person reasonably
believed to be in or not opposed to the best interest of the Registrant and,
with respect to any proceeding, had no reasonable cause to believe his or her
conduct was unlawful. The Registrant's Bylaws also set forth certain procedures
that will apply in the event of a claim for indemnification thereunder.
At present, there is no pending litigation or proceeding involving a
director or officer of the Registrant as to which indemnification is being
sought nor is the Registrant aware of any threatened litigation that may result
in claims for indemnification by any officer or director.
II-1
<PAGE>
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ------------- --------------------------------------------------------------------------
<S> <C>
4.1* Form of certificate representing shares of the Registrant's common stock.
5.1 Opinion of Wyrick Robbins Yates & Ponton LLP.
23.1 Consent of Deloitte & Touche LLP.
23.2 Consent of Wyrick Robbins Yates & Ponton LLP (contained in Exhibit 5.1).
23.3 Consent of Thomas C. Cannon.
24.1 Power of Attorney (see page II-4).
</TABLE>
- ---------
* Incorporated by reference to the similarly numbered Exhibit to the
Registrant's Registration Statement on Form S-1 (File No. 333-25631) for
which provision is made in Regulation S-X are omitted because they are not
required under the related instructions, are inapplicable, or the required
information is given in the financial statements, including the notes
thereto and, therefore, have been omitted.
ITEM 17. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes as follows:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the
effective registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) above do not
apply if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the registrant
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934
that are incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of
the offering.
(4) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
related to the securities offered therein, and the offering of such securities
at the time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been
II-2
<PAGE>
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer of controlling person or the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certified that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Raleigh, State of North Carolina, on this 21st day
of May 1999.
WASTE INDUSTRIES, INC.
By: /s/ LONNIE C. POOLE, JR.
-------------------------------------
LONNIE C. POOLE, JR.
CHAIRMAN
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Lonnie
C. Poole, Jr. and Stephen C. Shaw, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement and any related Registration
Statements filed pursuant to Rule 462(b) promulgated under the Securities Act
of 1933, and to file the same, with all exhibits thereto, and other documents
in connection therewith, with the Securities and Exchange Commission, granting
unto said attorney-in-fact and agent, full power and authority to do and
perform each and every act and thing requisite and necessary to be done in and
about the premises, as fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent, or his or her substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
- --------------------------------------- ------------------------------------ -------------
<S> <C> <C>
/s/ LONNIE C. POOLE, JR. Director, Chairman and Chief May 21, 1999
------------------------------
LONNIE C. POOLE, JR. Executive Officer (Principal
Executive Officer)
/s/ STEPHEN C. SHAW Vice President, Finance (Principal May 21, 1999
------------------------------
STEPHEN C. SHAW Financial and Accounting Officer)
/s/ ROBERT H. HALL Director May 21, 1999
------------------------------
ROBERT H. HALL
/s/ JIM W. PERRY Director May 21, 1999
------------------------------
JIM W. PERRY
/s/ J. GREGORY POOLE, JR. Director May 21, 1999
------------------------------
J. GREGORY POOLE, JR.
/s/ THOMAS F. DARDEN Director May 21, 1999
------------------------------
THOMAS F. DARDEN
</TABLE>
II-4
May 21, 1999
Waste Industries, Inc.
3949 Browning Place
Raleigh, North Carolina 27609
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-3 filed on the date
hereof by Waste Industries, Inc., a North Carolina corporation (the "Company"),
with the Securities and Exchange Commission (the "Registration Statement"), in
connection with the registration under the Securities Act of 1933, as amended,
of 486,723 shares of the Company's Common Stock, no par value per share (the
"Shares"). The Shares are to be resold as described in the Registration
Statement. In our examination, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals and
the conformity with the original of all documents submitted to us as copies
thereof.
As our legal counsel, we have examined the proceedings taken, and are
familiar with the proceedings proposed to be taken, in connection with the sale
of the Shares.
It is our opinion that, upon completion of the proceedings being taken or
contemplated by us, as your counsel, to be taken prior to the sale of the
Shares, including the proceedings being taken in order to permit such
transactions to be carried out in accordance with applicable state securities
laws, the Shares when sold in the manner referred to in the Registration
Statement and in accordance with the resolutions adopted by the Board of
Directors of the Company, will be legally and validly issued, fully paid and
nonassessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement and further consent to the use of our name whenever appearing in the
Registration Statement, including the Prospectus constituting a part thereof,
and any amendments thereto.
Very truly yours,
/s/ WYRICK ROBBINS YATES & PONTON LLP
INDEPENDENT AUDITORS' CONSENT
We consent to the incorpporation by reference in this Registration Statement of
Waste Industries, Inc. on Form S-3 of our report dated March 1, 1999 appearing
in the Annual Report on Form 10-K of Waste Industries, Inc. for the year ended
December 31, 1998.
\s\DELOITTE & TOUCHE LLP
Raleigh, North Carolina
May 20, 1999
Pursuant to Rule 438 promulgated under the Securities Act of 1933, as
amended, the undersigned hereby agrees to being named in this Registration
Statement and all amendments (including post-effective amendments) to this
Registration Statement and any related Registration Statements filed pursuant to
Rule 462(b) promulgated under the Securities Act of 1933, as a person to become
a director of the Registrant.
In addition, the undersigned constitutes and appoints Lonnie C. Poole, Jr.
and Stephen C. Shaw, and each of them, his true and lawful attorney-in-fact and
agent, with full power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Registration Statement and any
related Registration Statements filed pursuant to Rule 462(b) promulgated under
the Securities Act of 1933, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent, full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent, or his or her substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
THOMAS C. CANNON May 20, 1999
- --------------------------------
Thomas C. Cannon
