Valhi Reports Operating Loss for WCS in Second Quarter of This Year

Waste Control Specialists suffered an operating loss of $5 million for the second quarter of this year, according to a Securities and Exchange Commission filing by WCS’ parent company Valhi Inc. late last week. The operating loss combined with a loss last quarter totals an operating loss of $13.5 million for 2014, an increase of operating losses of $7.5 million compared to the same period of last year. Valhi sees the solution to the operating loss is to increase sales volumes. “While achieving increased sales volumes could result in operating profits, we currently do not believe we will report any significant levels of Waste Management operating profit until we have started to generate revenues sufficient to cover the high fixed costs of operating our disposal facilities,” Valhi said in its SEC filing. “We have regularly received small volumes of waste for disposal since the end of the second quarter of 2013 for the Federal LLRW disposal facility, but it may be difficult for us to generate positive operating results until we begin routinely receiving large Federal LLRW streams for disposal.”

Valhi also reiterated again its willingness to explore strategic alternatives for WCS. “We believe WCS can become a viable, profitable operation; however, we do not know if we will be successful in improving WCS’ cash flows,” the company said in the filing. “We have in the past, and we may in the future, consider strategic alternatives with respect to WCS. We could report a loss in any such strategic transaction.”