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Original Source: FD (FAIR DISCLOSURE) WIRE
OPERATOR: Ladies and gentlemen, thank you for standing by. Welcome to the Allied Waste Industries first quarter 2008 earnings conference call.
At this time, all participants are in a listen-only mode. After the prepared remarks by the Company, we will conduct a question-and-answer session. (OPERATOR INSTRUCTIONS) As a reminder, this conference is being recorded Wednesday, April 30, 2008.
I will now turn the call over to Jim Zeumer, Senior Vice President Communications. Please go ahead, sir.
JIM ZEUMER, SVP COMMUNICATIONS, ALLIED WASTE INDUSTRIES, INC.: Thank you, Holly, and good afternoon and welcome to Allied Waste's conference call to discuss operating and financial results for our first quarter ended March 31, 2008.
Our earnings release issued earlier today provides information on Allied Waste's strong first quarter results.
On the call to discuss our results are John Zeumer, Chairman and Chief Executive Officer, Don Slager, President and Chief Operating Officer, Pete Hathaway, Executive Vice President and Chief Financial Officer. Also joining us in the room today is Mike Burnett, Senior Vice President and Treasurer.
Before we start let me remind everyone that certain matters discussed during this call are forward-looking statements intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These statements are generally identified as such because of the context of the statements include the words such as the Company believes, anticipates, expects, or words of similar import.
Forward-looking statements are subject to certain risks, uncertainties and other factors which could cause actual results to differ materially from those currently anticipated. The description of such risks, uncertainties and other factors can say be found in our periodic reports filed with the Securities and Exchange Commission.
Shareholders, potential investors and other participants are encouraged to consider these facts carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such statements. Forward-looking statements made during today's conference call are made only as of the date of this call and the Company undertakes no obligation to publicly update these statements to reflect subsequent events or circumstances.
Our presentation also includes certain financial pressures including gross profit, free cash flow and EBITDA, or operating income before depreciation and amortization, that are considered non-GAAP financial measures. You can access information required by the SEC about these non-GAAP financial measures including a reconciliation to the most directly comparable GAAP financial measure in our press release for the first quarter which is located on our Web site at alliedwaste.com.
I'll now turn the call over to John Zillmer, Chairman and CEO.
JOHN ZILLMER, CHAIRMAN, CEO, ALLIED WASTE INDUSTRIES, INC.: Thanks, Jim.
We are very pleased to provide today's update on Allied Waste's business results with solid first quarter revenue growth, a 9% gain in continuing EBITDA and record profits including adjusted EPS from continuing operations increasing by more than 40%. It is clear that the operating and financial gains we saw accelerate over the course of 2007 have carried through into 2008. Allied Waste is a company with a lot of positive momentum.
Over the past several years, the strategic initiatives we have successfully implemented to improve our core operations have put Allied Waste in a strong position heading into these more challenging economic times. As we've discussed on our Q4 call, in addition to these longer term programs, we proactively took steps including adjusting our staffing levels to position the business for sustained success.
On our last conference call I talked about Allied Waste being a changed company, a company with a supportive capital structure and improved operations and free cash flow generation, centralized pricing and purchasing. I talked about how these and other durable capabilities are taking hold in our organization.
I'd like to continue this discussion and talk about next steps in the long-term development of Allied Waste. Going forward, we will continue to advance and refine our strategic pricing programs.
Q1 price was up 6.1%, a clear indication that we are still reaping tremendous benefits from our ongoing efforts to enhance our pricing model. Through upgrades to our information systems, the expanded use of customer data and analytical capabilities and growing expertise within our pricing team, there remain a lot of opportunities for these programs to deliver benefits well into the future.
While price is a powerful driver of financial performance, we are also leveraging these gains by capturing greater efficiency at all levels of the organization. Through centralized procurement to local implementation of best practices we are aggressively working to lower our costs.
Don will review our operating expenses for the quarter and you will see that on an absolute dollar basis, costs, excluding fuel, were essentially flat year-over-year and were down in a number of key categories. We believe we can continue to translate the expertise of our people, best practices and innovation into better service for our customers and improved financial performance for our investors.
We have talked about an interim goal of increasing EBITDA margins to roughly 30%. For the full-year 2007 we achieved an EBITDA margin above 27% and realized a 140 basis point increase in our year-over-year 2008 Q1 margin. Allied Waste's results demonstrate that we are capturing opportunities to improve performance and turning them into tangible financial results.
As we look ahead to the ongoing growth and development of our company, we will continue enhancing our offering to the customer. This means improving the value and quality of service we provide as well as expanding our overall service portfolio.
One of our four strategic pillars focuses on the customer. We believe that our vertically integrated operating model …