##### Table of Contents



UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549
      Form 10-Q
  (Mark One)þ

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the Quarterly Period Ended March 31, 2008oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission File Number:
    000-25955
      Waste Services, Inc.
 (Exact name of registrant as
    specified in its charter)
  Delaware

01-0780204(State or other jurisdiction
    of
    incorporation or organization)

(I.R.S. Employer
    Identification No.)   1122
    International Blvd., Suite 601, Burlington, Ontario, Canada
    L7L 6Z8 (Address
    of principal executive offices) (Zip Code)
  (905) 319-1237
 (Registrants telephone
    number, including area code)
  þ o
  Rule 12b-2
  Large
    accelerated
    filer o
    Accelerated
    filer þ
    Non-accelerated
    filer o
    Smaller
    reporting
    company o (Do
    not check if a smaller reporting company)
  Rule 12b-2 o þ




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##### 



TABLE OF
    CONTENTS
  PagePART I  FINANCIAL
    INFORMATIONItem 1. Financial StatementsUnaudited Condensed Consolidated Balance Sheets
    as of March 31, 2008 and December 31, 2007


2Unaudited Condensed Consolidated Statements of
    Operations for the three months ended March 31, 2008 and
    2007


3Unaudited Condensed Consolidated Statement of
    Shareholders Equity for the three months ended
    March 31, 2008


4Unaudited Condensed Consolidated Statements of
    Cash Flows for the three months ended March 31, 2008 and
    2007


5Notes to Unaudited Condensed Consolidated
    Financial Statements


6Item 2. Managements Discussion and
    Analysis of Financial Condition and Results of Operations


27Item 3. Quantitative and Qualitative
    Disclosures About Market Risk


40Item 4. Controls and Procedures


40PART II  OTHER
    INFORMATIONItem 1. Legal Proceedings


41Item 1A. Risk Factors


41Item 2. Unregistered Sales of Equity
    Securities and Use of Proceeds


41Item 3. Defaults Upon Senior Securities


41Item 4. Submission of Matters to a Vote of
    Security Holders


41Item 5. Other Information


41Item 6. Exhibits


41Signatures


42Ex-10.1 Second Amendment to Second Amended and Restated Credit AgreementEx-31.1 Section 302 Certification of CEOEx-31.2 Section 302 Certification of CFOEx-32.1 Section 1350 Certification of CEO and CFO




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##### Table of Contents



PART I. FINANCIAL INFORMATION  Item 1.
    Financial
    Statements  WASTE
    SERVICES, INC.
  UNAUDITED CONDENSED CONSOLIDATED BALANCE
    SHEETS
 (In thousands, except share amounts)
  March 31,


December 31,2008


2007ASSETSCurrent assets:Cash and cash equivalents

$
32,286


$
20,706Accounts receivable (net of allowance for doubtful accounts of
    $698 and $985 as of March 31, 2008 and December 31,
    2007, respectively)


59,017



67,195Prepaid expenses and other current assets


10,361



11,338Current assets of discontinued operations






167Total current assets


101,664



99,406Property and equipment, net


190,125



192,598Landfill sites, net


189,648



190,451Goodwill and other intangible assets, net


392,463



397,766Other assets


18,504



17,741Non-current assets of discontinued operations






40,526Total assets

$
892,404


$
938,488LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Accounts payable

$
21,248


$
26,641Accrued expenses and other current liabilities


65,655



65,338Short-term financing and current portion of long-term debt


1,267



2,631Current liabilities of discontinued operations






765Total current liabilities


88,170



95,375Long-term debt


400,371



441,809Accrued closure, post-closure, deferred income taxes and
    other obligations


46,980



48,514Non-current liabilities of discontinued operations






2,195Total liabilities


535,521



587,893Shareholders equity:Common stock $0.01 par value: 166,666,666 shares
    authorized, 43,973,920 and 43,972,362 shares issued and
    outstanding as of March 31, 2008 and December 31,
    2007, respectively


439



439Additional paid-in capital


511,167



510,286Accumulated other comprehensive income


58,716



66,017Accumulated deficit


(213,439
)


(226,147
)Total shareholders equity


356,883



350,595Total liabilities and shareholders equity

$
892,404


$
938,488    2




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##### Table of Contents



WASTE
    SERVICES, INC.



UNAUDITED
    CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In
    thousands, except per share data) Three Months Ended March 31,2008


2007Revenue

$
116,609


$
94,999Operating and other expenses:Cost of operations (exclusive of depreciation, depletion and
    amortization)


76,544



62,767Selling, general and administrative expense (exclusive of
    depreciation, depletion and amortization)


16,365



14,431Depreciation, depletion and amortization


11,790



11,358Foreign exchange gain and other


(173
)


(423
)Income from operations


12,083



6,866Interest expense


10,238



9,745Income (loss) from continuing operations before income
    taxes


1,845



(2,879
)Income tax provision (benefit)


(3,433
)


1,364Net income (loss) from continuing operations


5,278



(4,243
)Net income from discontinued operations, net of income tax
    provision of $301and $2 for the three months ended March 31, 2008 and 2007,
    respectively


461



3Gain on sale of discontinued operations, net of income tax
    provision of $4,549and $371 for the three months ended March 31, 2008 and
    2007, respectively


6,969



567Net income (loss)

$
12,708


$
(3,673
)Basic and diluted earnings (loss) per share:Earnings (loss) per share  continuing operations

$
0.12


$
(0.09
)Earnings per share  discontinued operations


0.16



0.01Basic and diluted earnings (loss) per share

$
0.28


$
(0.08
)Weighted average common shares outstanding  basic


46,075



45,972Weighted average common shares outstanding  diluted


46,093



45,972    3




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##### Table of Contents



WASTE
    SERVICES, INC.
    UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS
    EQUITYFor the Three Months Ended March 31, 2008
    (In thousands) AccumulatedWaste Services, Inc.





Other





TotalCommon Stock


Additional


Comprehensive


Accumulated


ShareholdersShares


Amount


Paid-in Capital


Income


Deficit


EquityBalance, December 31, 2007


43,972


$
439


$
510,286


$
66,017


$
(226,147
)

$
350,595Stock-based compensation










881











881Conversion of exchangeable shares


2



















Foreign currency translation adjustment














(7,301
)






(7,301
)Net income


















12,708



12,708Balance, March 31, 2008


43,974


$
439


$
511,167


$
58,716


$
(213,439
)

$
356,883    4




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##### Table of Contents



WASTE
    SERVICES, INC.



UNAUDITED
    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In
    thousands)  Three Months Ended March 31,2008


2007Cash flows from operating activities:Net income (loss)

$
12,708


$
(3,673
)Adjustments to reconcile net income (loss) to net cash flows
    from operating activities:Net income from discontinued operations


(7,430
)


(570
)Depreciation, depletion and amortization


11,790



11,358Amortization of debt issue costs


1,038



485Deferred income tax benefit


(5,556
)


(146
)Non-cash stock-based compensation expense


881



323Other non-cash items


(4
)


149Changes in operating assets and liabilities (excluding the
    effects of acquisitions and dispositions):Accounts receivable


7,209



3,009Prepaid expenses and other current assets


(35
)


(1,059
)Accounts payable


(5,053
)


(1,552
)Accrued expenses and other current liabilities


(7,214
)


630Net cash provided by continuing operations


8,334



8,954Net cash provided by discontinued operations


1,163



2,970Net cash provided by operating activities


9,497



11,924Cash flows from investing activities:Cash used in business combinations and significant asset
    acquisitions, net of cash acquired






(15,312
)Capital expenditures


(10,407
)


(7,403
)Proceeds from sale of the Jacksonville, Florida operations


56,849



Proceeds from asset sales


483



140Deposits for business acquisitions and other


(1,716
)


(11,646
)Net cash provided by (used in) continuing operations


45,209



(34,221
)Net cash used in discontinued operations


(43
)


(2,440
)Net cash provided by (used in) investing activities


45,166



(36,661
)Cash flows from financing activities:Proceeds from issuance of debt and draw on revolving credit
    facility






26,000Principal repayments of debt and capital lease obligations


(42,859
)


(2,318
)Proceeds from the exercise of options and warrants






5Net cash provided by (used in) financing activities of
    continuing operations


(42,859
)


23,687Effect of exchange rate changes on cash and cash equivalents


(224
)


38Increase (decrease) in cash and cash equivalents


11,580



(1,012
)Cash and cash equivalents at the beginning of the period


20,706



8,532Cash and cash equivalents at the end of the period

$
32,286


$
7,520    5




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##### Table of Contents



WASTE
    SERVICES, INC.



NOTES TO
    UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  1.
    Organization
    of Business and Basis of Presentation    Form 10-K. Form 10-K
     6




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##### Table of Contents



WASTE
    SERVICES, INC.
  NOTES TO
    UNAUDITED CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS  (Continued)
        2007Common Shares issuable under exercisable options


21Common Shares issuable under exercisable warrants


596Dilutive securities


617     2.
    Recently
    Issued Accounting Pronouncements and Adopted
    Accounting  1 2
 7




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##### Table of Contents



WASTE
    SERVICES, INC.
  NOTES TO
    UNAUDITED CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS  (Continued)
          3.
    Share-Based
    Payments   8




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##### Table of Contents



WASTE
    SERVICES, INC.
  NOTES TO
    UNAUDITED CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS  (Continued)
      Three MonthsEnded March 31,2008


2007Annual dividend yield






Weighted average expected life (years)


7.0



3.0Risk-free interest rate


3.2
%


4.5
%Expected volatility


61
%


92
%         4.
    Discontinued
    Operations   9




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##### Table of Contents



WASTE
    SERVICES, INC.
  NOTES TO
    UNAUDITED CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS  (Continued)
          Prepaid expenses and other current assets

$
167Current assets of discontinued operations


167Property and equipment


7,219Landfill sites


7,610Goodwill and other intangible assets


25,697Non-current assets of discontinued operations


40,526Total assets of discontinued operations

$
40,693Accrued expenses and other current liabilities

$
765Current liabilities of discontinued operations


765Accrued closure, post closure and other obligations


2,195Non-current liabilities of discontinued operations


2,195Total liabilities of discontinued operations

$
2,960Net assets of discontinued operations

$
37,733   5.
    Business
    Combinations and Significant Asset Acquisitions     10




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##### Table of Contents



WASTE
    SERVICES, INC.
  NOTES TO
    UNAUDITED CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS  (Continued)
      and/or
    Revenue

$
114,762Net loss from continuing operations

$
(2,706
)Basic and diluted loss per share  continuing
    operations

$
(0.06
)Basic and diluted pro forma weighted average number of
    common shares outstanding


45,972    11




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##### Table of Contents



WASTE
    SERVICES, INC.
  NOTES TO
    UNAUDITED CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS  (Continued)
  6.
    Prepaid
    Expenses and Other Current Assets    March 31,


December 31,2008


2007Prepaid expenses

$
4,580


$
5,808Parts and supplies


2,192



2,192Royalty receivable


1,276



1,321Other current assets


2,313



2,017$
10,361


$
11,338   7.
    Property
    and Equipment    March 31,


December 31,2008


2007Land and buildings

$
68,106


$
67,088Vehicles


145,163



144,926Containers, compactors and landfill and recycling equipment


91,476



92,733Furniture, fixtures, other office equipment and leasehold
    improvements


12,164



12,449Total property and equipment


316,909



317,196Less: Accumulated depreciation


(126,784
)


(124,598
)Property and equipment, net

$
190,125


$
192,598   8.
    Landfill
    Sites, Accrued Closure, Post-Closure, Deferred Income Taxes and
    Other Obligations  Landfill
    Sites
    March 31,


December 31,2008


2007Landfill sites

$
253,902


$
253,266Less: Accumulated depletion


(64,254
)


(62,815
)Landfill sites, net

$
189,648


$
190,451  12




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##### Table of Contents



WASTE
    SERVICES, INC.
  NOTES TO
    UNAUDITED CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS  (Continued)
    2008


2007Balance at the beginning of the period

$
190,451


$
187,796Landfill site construction costs


1,960



2,975Reclassification to conservatory






(1,029
)Additional asset retirement obligations


423



678Depletion


(2,615
)


(3,974
)Effect of foreign exchange rate fluctuations


(571
)


140Balance at the end of the period

$
189,648


$
186,586   Accrued
    Closure, Post-Closure, Deferred Income Taxes and Other
    Obligations
    March 31,


December 31,2008


2007Accrued closure and post-closure obligations

$
15,004


$
14,678Deferred income tax liability


28,191



29,644Accrued severance


1,945



2,181Capital lease obligations


807



867Other obligations


1,033



1,144$
46,980


$
48,514     2008


2007Current portion at the beginning of period

$
4,153


$
5,570Long-term portion at the beginning of period


14,678



8,360Balance at the beginning of period


18,831



13,930Additional asset retirement obligations


423



678Other additions


300



Accretion


198



139Payments






(457
)Effect of foreign exchange rate fluctuations


(318
)


67Balance at the end of period


19,434



14,357Less: Current portion


(4,430
)


(5,517
)Long-term portion

$
15,004


$
8,840  13




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##### Table of Contents



WASTE
    SERVICES, INC.
  NOTES TO
    UNAUDITED CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS  (Continued)
    9.
    Goodwill
    and Other Intangible Assets    March 31,


December 31,2008


2007Other intangible assets subject to amortization:Customer relationships and contracts

$
51,799


$
51,924Non-competition agreements and other


5,891



6,01157,690



57,935Less: Accumulated amortization:Customer relationships and contracts


(25,058
)


(23,714
)Non-competition agreements and other


(1,591
)


(1,396
)Other intangible assets subject to amortization, net


31,041



32,825Goodwill


361,422



364,941Goodwill and other intangible assets, net

$
392,463


$
397,766     Three Months Ended March 31, 2008Florida


Canada


TotalBalance at the beginning of the period

$
262,338


$
102,603


$
364,941Effect of foreign exchange rate fluctuations






(3,519
)


(3,519
)Balance at the end of the period

$
262,338


$
99,084


$
361,422   Three Months Ended March 31, 2007Florida


Canada


TotalBalance at the beginning of the period

$
211,482


$
86,848


$
298,330Acquisitions


20,532







20,532Purchase price allocation adjustments for prior acquisitions


1,051



61



1,112Effect of foreign exchange rate fluctuations






810



810Balance at the end of the period

$
233,065


$
87,719


$
320,784  14




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##### Table of Contents



WASTE
    SERVICES, INC.
  NOTES TO
    UNAUDITED CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS  (Continued)
  10.
    Other
    Assets    March 31,


December 31,2008


2007Debt issue costs, net of accumulated amortization of $5,925 and
    $5,787 as of March 31, 2008 and December 31, 2007,
    respectively

$
6,784


$
7,822Acquisition deposits and deferred acquisition costs


11,123



9,407Other assets


597



512$
18,504


$
17,741     11.
    Accrued
    Expenses and Other Current Liabilities    March 31,


December 31,2008


2007Deferred revenue

$
11,522


$
11,613Accrued compensation, benefits and subcontractor costs


8,394



13,141Accrued acquisition costs


8,161



1,200Accrued interest


7,904



4,588Accrued waste disposal costs


6,422



6,555Accrued insurance


6,370



6,055Accrued closure and post-closure obligations


4,430



4,153Accrued royalties and franchise fees


3,252



3,239Accrued capital expenditures


2,154



2,233Accrued federal and provincial current taxes payable


1,186



8,158Accrued professional fees


818



970Current portion of capital lease obligations


236



232Other accrued expenses and current liabilities


4,806



3,201$
65,655


$
65,338  15




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##### Table of Contents



WASTE
    SERVICES, INC.
  NOTES TO
    UNAUDITED CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS  (Continued)
  12.
    Debt    March 31,


December 31,2008


2007Senior Secured Credit Facilities:Revolving credit facility

$



$
Term loan facility, floating interest rate at 5.2% and 7.4% as
    of March 31, 2008 and December 31, 2007, respectively,
    due $592 per quarter from September 2009 through March 2010 and
    $57,409 per quarter thereafter, due March 2011


231,410



273,910Senior Subordinated Notes, fixed interest rate at 9.5%, due 2014


160,000



160,000Other secured notes payable, interest at 4.5% to 7.8%, due
    through 2025 (net of discount of $1,978 and $2,126 at
    March 31, 2008 and December 31, 2007, respectively)


7,680



7,932Other subordinated notes payable, interest at 6.7%, due through
    2017


2,548



2,598401,638



444,440Less: Current portion


(1,267
)


(2,631
)Long-term portion

$
400,371


$
441,809   Senior
    Secured Credit Facilities
     16




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##### Table of Contents



WASTE
    SERVICES, INC.
  NOTES TO
    UNAUDITED CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS  (Continued)
  Other
    Secured Notes Payable
    Senior
    Subordinated Notes
  1 2
      Direct
    Financing Lease Facility
    13.
    Commitments
    and Contingencies  Environmental
    Risks
   17




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##### Table of Contents



WASTE
    SERVICES, INC.
  NOTES TO
    UNAUDITED CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS  (Continued)
      Legal
    Proceedings
        Surety
    Bonds, Letters of Credit and Insurance
     18




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##### Table of Contents



WASTE
    SERVICES, INC.
  NOTES TO
    UNAUDITED CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS  (Continued)
    Three Months Ended March 31,2008


2007Balance at the beginning of the period

$
6,055


$
5,327Provisions


1,182



800Payments


(964
)


(1,141
)Unfavorable claim development for prior periods


97



283Balance at the end of the period

$
6,370


$
5,269   Disposal
    Agreement
  and/or
    Other
    Contractual Arrangements
    14.
    Authorized
    Capital Stock and Migration Transaction  Total
    Shares
    
    166,666,666 shares of common stock, par value 0.01 per
    share; and
    5,000,000 shares of preferred stock, par value 0.01 per
    share, of which 100,000 shares have been designated as
    Series A Preferred Stock and one share has been designated
    as Special Voting Preferred Stock. 19




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##### Table of Contents



WASTE
    SERVICES, INC.
  NOTES TO
    UNAUDITED CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS  (Continued)
   Preferred
    Stock
    Migration
    Transaction
    non-U.S. residents
      15.
    Comprehensive
    Income (Loss)    Three Months Ended March 31,2008


2007Net income (loss)

$
12,708


$
(3,673
)Foreign currency translation adjustment


(7,301
)


1,598Comprehensive income (loss)

$
5,407


$
(2,075
)  20




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##### Table of Contents



WASTE
    SERVICES, INC.
  NOTES TO
    UNAUDITED CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS  (Continued)
  16.
    Segment
    Information        Three Months Ended March 31, 2008Florida


Canada


Corporate


TotalRevenue

$
60,090


$
56,519


$



$
116,609Depreciation, depletion and amortization


6,823



4,609



358



11,790Income (loss) from operations


10,119



9,343



(7,379
)


12,083Capital expenditures


1,682



8,613



112



10,407   Three Months Ended March 31, 2007Florida


Canada


Corporate


TotalRevenue

$
50,198


$
44,801


$



$
94,999Depreciation, depletion and amortization


7,377



3,663



318



11,358Income (loss) from operations


7,619



6,291



(7,044
)


6,866Capital expenditures


3,235



3,644



524



7,403   17.
    Condensed
    Consolidating Financial Statements   21




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##### Table of Contents



WASTE
    SERVICES, INC.
  NOTES TO
    UNAUDITED CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS  (Continued)
    March 31, 2008Non-Parent


Guarantors


Guarantors


Eliminations


ConsolidatedASSETSCurrent assets:Cash and cash equivalents

$
26,310


$
139


$
5,837


$



$
32,286Accounts receivable, net






28,201



30,816







59,017Prepaid expenses and other current assets


450



2,554



7,357







10,361Total current assets


26,760



30,894



44,010







101,664Property and equipment, net


213



97,138



92,774







190,125Landfill sites, net






173,598



16,050







189,648Goodwill and other intangible assets, net






292,412



100,051







392,463Other assets


18,328



176











18,504Due from affiliates


1,601











(1,601
)


Investment in subsidiary


766,570











(766,570
)


Total assets

$
813,472


$
594,218


$
252,885


$
(768,171
)

$
892,404LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Accounts payable

$
7,092


$
1,779


$
12,377


$



$
21,248Accrued expenses and other current liabilities


26,885



24,101



14,669







65,655Short-term financing and current portion of long-term debt


1,061



206











1,267Total current liabilities


35,038



26,086



27,046







88,170Long-term debt


398,029



2,342











400,371Accrued closure, post-closure, deferred income taxes and
    other obligations


23,522



6,594



16,864







46,980Due to affiliates










1,601



(1,601
)


Total liabilities


456,589



35,022



45,511



(1,601
)


535,521Shareholders equity:Common stock of Waste Services, Inc


439















439Other equity


356,444



559,196



207,374



(766,570
)


356,444Total shareholders equity


356,883



559,196



207,374



(766,570
)


356,883Total liabilities and shareholders equity

$
813,472


$
594,218


$
252,885


$
(768,171
)

$
892,404   22




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##### Table of Contents



WASTE
    SERVICES, INC.
  NOTES TO
    UNAUDITED CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS  (Continued)
  December 31, 2007Non-Parent


Guarantors


Guarantors


Eliminations


ConsolidatedASSETSCurrent assets:Cash and cash equivalents

$
9,080


$
239


$
11,387


$



$
20,706Accounts receivable, net






30,902



36,293







67,195Prepaid expenses and other current assets


37



2,449



8,852







11,338Current assets of discontinued operations






167











167Total current assets


9,117



33,757



56,532







99,406Property and equipment, net


235



99,541



92,822







192,598Landfill sites, net






173,803



16,648







190,451Goodwill and other intangible assets, net






294,056



103,710







397,766Other assets


17,550



191











17,741Due from affiliates


1,021











(1,021
)


Investment in subsidiary


816,054











(816,054
)


Non-current assets of discontinued operations






40,526











40,526Total assets

$
843,977


$
641,874


$
269,712


$
(817,075
)

$
938,488LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Accounts payable

$
9,480


$
2,903


$
14,258


$



$
26,641Accrued expenses and other current liabilities


17,571



21,973



25,794







65,338Short-term financing and currentportion of long-term debt


2,428



203











2,631Current liabilities of discontinued operations






765











765Total current liabilities


29,479



25,844



40,052







95,375Long-term debt


439,415



2,394











441,809Accrued closure, post-closure, deferred income taxes and
    other obligations


24,488



6,134



17,892







48,514Due to affiliates










1,021



(1,021
)


Non-current liabilities of discontinued operations






2,195











2,195Total liabilities


493,382



36,567



58,965



(1,021
)


587,893Shareholders equity:Common stock of Waste Services, Inc


439















439Other equity


350,156



605,307



210,747



(816,054
)


350,156Total shareholders equity


350,595



605,307



210,747



(816,054
)


350,595Total liabilities and shareholders equity

$
843,977


$
641,874


$
269,712


$
(817,075
)

$
938,488   23




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##### Table of Contents



WASTE
    SERVICES, INC.
  NOTES TO
    UNAUDITED CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS  (Continued)
  Three Months Ended March 31, 2008Non-Parent


Guarantors


Guarantors


Eliminations


ConsolidatedRevenue

$



$
60,090


$
56,519


$



$
116,609Operating and other expenses:Cost of operations (exclusive of depreciation, depletion and
    amortization)






38,916



37,628







76,544Selling, general and administrative expense (exclusive of
    depreciation, depletion and amortization)


3,667



4,433



8,265







16,365Depreciation, depletion and amortization


24



6,823



4,943







11,790Foreign exchange loss (gain) and other


1



(201
)


27







(173
)Equity earnings in investees, net of tax


(26,546
)










26,546



Income from operations


22,854



10,119



5,656



(26,546
)


12,083Interest expense


10,146



50



42







10,238Income from continuing operations before income taxes


12,708



10,069



5,614



(26,546
)


1,845Income tax provision (benefit)






(5,521
)


2,088







(3,433
)Net income from continuing operations


12,708



15,590



3,526



(26,546
)


5,278Net income from discontinued operations, net of tax






461











461Gain on sale of discontinued operations, net of tax






6,969











6,969Net income

$
12,708


$
23,020


$
3,526


$
(26,546
)

$
12,708   Three Months Ended March 31, 2007Non-Parent


Guarantors


Guarantors


Eliminations


ConsolidatedRevenue

$



$
50,198


$
44,801


$



$
94,999Operating and other expenses:Cost of operations (exclusive of depreciation, depletion and
    amortization)






31,935



30,832







62,767Selling, general and administrative expense (exclusive of
    depreciation, depletion and amortization)


4,831



3,297



6,303







14,431Depreciation, depletion and amortization


13



7,377



3,968







11,358Foreign exchange loss (gain) and other


(178
)


(30
)


(215
)






(423
)Equity earnings in investees, net of tax


(10,625
)










10,625



Income from operations


5,959



7,619



3,913



(10,625
)


6,866Interest expense


9,632



57



56







9,745Income (loss) from continuing operations before income
    taxes


(3,673
)


7,562



3,857



(10,625
)


(2,879
)Income tax provision (benefit)






(277
)


1,641







1,364Net income (loss) from continuing operations


(3,673
)


7,839



2,216



(10,625
)


(4,243
)Net income from discontinued operations, net of tax






3











3Gain on sale of discontinued operations, net of tax






567











567Net income (loss)

$
(3,673
)

$
8,409


$
2,216


$
(10,625
)

$
(3,673
)   24




---



##### Table of Contents



WASTE
    SERVICES, INC.
  NOTES TO
    UNAUDITED CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS  (Continued)
  Three Months Ended March 31, 2008Non-Parent


Guarantors


Guarantors


Eliminations


ConsolidatedNet cash provided by (used in) operating activities

$
(10,785
)

$
17,462


$
2,820


$



$
9,497Cash flows from investing activities:Capital expenditures


(4
)


(1,682
)


(8,721
)






(10,407
)Proceeds from sale of the Jacksonville, Florida operations






56,849











56,849Proceeds from asset sales and business divestitures






412



71







483Deposits for business acquisitions and other


(1,716
)














(1,716
)Intercompany


(504
)


(73,049
)






73,553



Net cash used in continuing operations


(2,224
)


(17,470
)


(8,650
)


73,553



45,209Net cash used in discontinued operations






(43
)










(43
)Net cash used in investing activities


(2,224
)


(17,513
)


(8,650
)


73,553



45,166Cash flows from financing activities:Principal repayments of debt and capital lease obligations


(42,810
)


(49
)










(42,859
)Intercompany


73,049







504



(73,553
)


Net cash provided by (used in) financing activities 
    continuing operations


30,239



(49
)


504



(73,553
)


(42,859
)Effect of exchange rate changes on cash and cash equivalents










(224
)






(224
)Increase (decrease) in cash and cash equivalents


17,230



(100
)


(5,550
)






11,580Cash and cash equivalents at the beginning of the period


9,080



239



11,387







20,706Cash and cash equivalents at the end of the period

$
26,310


$
139


$
5,837


$



$
32,286   25




---



##### Table of Contents



WASTE
    SERVICES, INC.
  NOTES TO
    UNAUDITED CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS  (Continued)
  Three Months Ended March 31, 2007Non-Parent


Guarantors


Guarantors


Eliminations


ConsolidatedNet cash provided by (used in) operating activities

$
(7,890
)

$
15,327


$
4,487


$



$
11,924Cash flows from investing activities:Cash used in business combinations and significant asset
    acquisitions, net of cash acquired






(15,312
)










(15,312
)Capital expenditures


(20
)


(3,235
)


(4,148
)






(7,403
)Proceeds from asset sales and business divestitures






131



9







140Deposits for business acquisitions and other


(10,015
)


(80
)


(1,551
)






(11,646
)Intercompany


(4,666
)






(1,391
)


6,057Net cash used in continuing operations


(14,701
)


(18,496
)


(7,081
)


6,057



(34,221
)Net cash used in discontinued operations






(2,440
)










(2,440
)Net cash used in investing activities


(14,701
)


(20,936
)


(7,081
)


6,057



(36,661
)Cash flows from financing activities:Proceeds from issuance of debt and draws on revolving credit
    facility


26,000















26,000Principal repayments of debt and capital lease obligations


(2,271
)


(47
)










(2,318
)Proceeds from the exercise of options and warrants


5















5Intercompany


1,391



4,666







(6,057
)


Net cash provided by financing activities  continuing
    operations


25,125



4,619







(6,057
)


23,687Effect of exchange rate changes on cash and cash equivalents










38







38Increase (decrease) in cash and cash equivalents


2,534



(990
)


(2,556
)






(1,012
)Cash and cash equivalents at the beginning of the period


2,190



563



5,779







8,532Cash and cash equivalents at the end of the period

$
4,724


$
(427
)

$
3,223


$



$
7,520  26




---



##### Table of Contents



Item 2.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  Form 10-K
  Overview
    Sources
    of Revenue
           27




---



##### Table of Contents



Expense
    Structure
          units-of-consumption not-to-compete,
    Recent
    Developments
   28




---



##### Table of Contents



29




---



##### Table of Contents



Results
    of Operations for the Three Months Ended March 31, 2008 and
    2007
      Three Months Ended March 31, 2008Florida





Canada





TotalRevenue

$
60,090



100.0
%

$
56,519



100.0
%

$
116,609



100.0
%Operating expenses:Cost of operations


38,916



64.8
%


37,628



66.6
%


76,544



65.6
%Selling, general and administrative expense


8,100



13.5
%


8,265



14.7
%


16,365



14.0
%Depreciation, depletion and amortization


6,847



11.4
%


4,943



8.7
%


11,790



10.1
%Foreign exchange loss (gain) and other


(200
)


-0.4
%


27



0.0
%


(173
)


-0.1
%Income from operations

$
6,427



10.7
%

$
5,656



10.0
%

$
12,083



10.4
%   Three Months Ended March 31, 2007Florida





Canada





TotalRevenue

$
50,198



100.0
%

$
44,801



100.0
%

$
94,999



100.0
%Operating expenses:Cost of operations


31,935



63.6
%


30,832



68.8
%


62,767



66.1
%Selling, general and administrative expense


8,128



16.2
%


6,303



14.1
%


14,431



15.2
%Depreciation, depletion and amortization


7,390



14.7
%


3,968



8.9
%


11,358



12.0
%Foreign exchange gain and other


(208
)


-0.4
%


(215
)


-0.5
%


(423
)


-0.5
%Income from operations

$
2,953



5.9
%

$
3,913



8.7
%

$
6,866



7.2
%  30




---



##### Table of Contents



Revenue
    Three Months Ended March 31,2008


2007Collection

$
96,505



74.8
%

$
75,765



71.3
%Landfill disposal


11,921



9.2
%


13,660



12.9
%Transfer station


14,671



11.4
%


13,787



13.0
%Material recovery facilities


5,786



4.5
%


2,922



2.7
%Other specialized services


192



0.1
%


140



0.1
%129,075



100.0
%


106,274



100.0
%Intercompany elimination


(12,466
)






(11,275
)$
116,609






$
94,999       Cost
    of Operations
       31




---



##### Table of Contents



Selling,
    General and Administrative Expense
    Depreciation,
    Depletion and Amortization
    Foreign
    Exchange Gain and Other
    Interest
    Expense
    2008


2007Credit Facility and Senior Subordinated Note interest

$
8,708


$
8,936Amortization of debt issue costs


1,038



485Other interest expense


492



324$
10,238


$
9,745    32




---



##### Table of Contents



Income
    Tax Provision (Benefit)
  start-up
        Liquidity
    and Capital Resources
  and/or
 33




---



##### Table of Contents



Senior
    Secured Credit Facilities
      Maximum

Maximum

MaximumConsolidated

Consolidated

ConsolidatedLeverage

Senior Secured

InterestRatio

Leverage Ratio

Coverage RatioSecond quarter - 2008

4.00 : 1.00

2.50 : 1.00

2.50 : 1.00Third quarter - 2008

4.00 : 1.00

2.50 : 1.00

2.50 : 1.00Fourth quarter - 2008

4.00 : 1.00

2.00 : 1.00

2.50 : 1.00First quarter - 2009

4.00 : 1.00

N/A

2.50 : 1.00     Other
    Secured Notes Payable
   34




---



##### Table of Contents



Senior
    Subordinated Notes
  1 2
      Direct
    Financing Lease Facility
    Surety
    Bonds, Letters of Credit and Insurance
     35




---



##### Table of Contents



Cash
    Flows
    Cash
    Flows from Operating Activities
    Cash
    Flows from Investing Activities
    Cash
    Flows from Financing Activities
    Cash
    Flow from Discontinued Operations
    Off-Balance
    Sheet Financing
   36




---



##### Table of Contents



and/or Form 10-K.
  Landfill
    Sites
    Balance,





Balance,Beginning


Airspace


Endof Period


Consumed


of PeriodUnited StatesPermitted capacity


51,255



(574
)


50,681Probable expansion capacity


29,577







29,577Total available airspace


80,832



(574
)


80,258Number of sites


3







3CanadaPermitted capacity


11,564



(92
)


11,472Probable expansion capacity


4,709







4,709Total available airspace


16,273



(92
)


16,181Number of sites


3







3TotalPermitted capacity


62,819



(666
)


62,153Probable expansion capacity


34,286







34,286Total available airspace


97,105



(666
)


96,439Number of sites


6







6     Trend
    Information
  Seasonality
   37




---



##### Table of Contents



New
    Accounting Pronouncements
  1 2
       38




---



##### Table of Contents



Disclosure
    Regarding Forward-Looking Statements and Factors Affecting
    Future Results
  Form 10-Q
    
    our substantial indebtedness and the significant restrictive
    covenants in our various credit facilities and our ability to
    finance acquisitions with cash on hand, debt or equity offerings;
    our ability to refinance our existing debt obligations to pay
    principal amounts due at maturity;
    our business is capital intensive and may consume cash in excess
    of cash flow from operations and borrowings;
    our ability to vertically integrate our operations;
    our ability to maintain and perform our financial assurance
    obligations;
    changes in regulations affecting our business and costs of
    compliance;
    revocation of existing permits and licenses or the refusal to
    renew or grant new permits and licenses, which are required to
    enable us to operate our business or implement our growth
    strategy;
    our domestic operations are concentrated in Florida, which may
    be subject to specific economic conditions that vary from those
    nationally as well as weather related events that may impact our
    operations;
    construction, equipment delivery or permitting delays for our
    transfer stations or landfills;
    our ability to successfully implement our corporate strategy and
    integrate any acquisitions we undertake;
    our ability to negotiate renewals of existing service agreements
    at favorable rates;
    our ability to enhance profitability of certain aspects of our
    operations in markets where we are not internalized through
    either divestiture or asset swaps;
    costs and risks associated with litigation; and
    changes in general business and economic conditions, exchange
    rates and the financial markets and accounting standards or
    pronouncements.  Form 10-K, Form 10-Q
 39




---



##### Table of Contents



Item 3.
    Quantitative
    and Qualitative Disclosures About Market Risk      Item 4.
    Controls
    and Procedures  Disclosure
    Controls and Procedures
  Rule 13a-15).
  Changes
    in Internal Controls Over Financial Reporting
   40




---



##### Table of Contents



PART II.  OTHER
    INFORMATION  Item 1.
    Legal
    Proceedings    Item 1A.
    Risk
    Factors  Form 10-K
  Item 2.
    Unregistered
    Sales of Equity Securities and Use of Proceeds    Item 3.
    Defaults
    Upon Senior Securities    Item 4.
    Submission
    of Matters to a Vote of Security Holders    Item 5.
    Other
    Information    Item 6.
    Exhibits  Exhibit 10.1
    
    Second Amendment to Second Amended and Restated Credit Agreement
    dated as of March 5, 2008 among Waste Services (CA) Inc.,
    Waste Services, Inc. and Lehman Commercial Paper Inc.Exhibit 31.1
    
    Section 302 Certification of David Sutherland-Yoest, Chief
    Executive OfficerExhibit 31.2
    
    Section 302 Certification of Edwin D. Johnson, Chief
    Financial OfficerExhibit 32.1
    
    Section 1350 Certification of the Chief Executive Officer
    and Chief Financial Officer 41




---



##### Table of Contents



SIGNATURES         By:
    /s/  DAVID
    SUTHERLAND-YOEST   Chairman of the Board, President 
    and Chief Executive Officer
   By:
    /s/  EDWIN
    D. JOHNSON   Executive Vice President, 
    Chief Financial Officer
 42




---



##### Table of Contents



EXHIBIT INDEX
  Exhibit No

DescriptionExhibit 10
.1

Second Amendment to Second Amended and Restated Credit Agreement
    dated as of March 5, 2008 among Waste Services (CA) Inc.,
    Waste Services, Inc. and Lehman Commercial Paper Inc.Exhibit 31
.1

Section 302 Certification of David Sutherland-Yoest, Chief
    Executive OfficerExhibit 31
.2

Section 302 Certification of Edwin D. Johnson, Chief
    Financial OfficerExhibit 32
.1

Section 1350 Certification of the Chief Executive Officer
    and Chief Financial Officer