Casella Waste Systems, Inc. Announces Completion of the Divestiture of $134.1 Million of Non-Integrated Recycling Assets
02 March 2011 - 8:05AM
Marketwired
Casella Waste Systems, Inc. (NASDAQ: CWST), a regional solid waste,
recycling and resource management services company, announced today
that it has completed the sale of select non-integrated recycling
assets to a new company formed by Pegasus Capital Advisors, L.P.
and Intersection, LLC for $134.1 million in gross proceeds,
including an estimated $3.7 million working capital adjustment.
Highlights include:
- Net cash proceeds of approximately $120.0
million to be used to repay Senior Secured Term Loan B
borrowings.
- Transaction results in pro forma leverage of
4.0x, down 0.4x from the October 31, 2010 leverage of 4.4x, as
calculated per Senior Secured Credit Agreement.
- The assets sold as part of this transaction
contributed $14.0 million consolidated Adjusted EBITDA* for the
twelve months ended October 31, 2010.
- The divested assets include the FCR recycling
assets located outside the company's core operating region of New
York, Massachusetts, Vermont, New Hampshire, Maine and northern
Pennsylvania, including 17 material recycling facilities, 1
transfer station and certain related intellectual property
assets.
- Casella's business strategy remains focused on
providing integrated solid waste, recycling, and resource
transformation solutions to its customers throughout the
Northeastern U.S.
"A little over a year ago we laid out an ambitious plan to drive
long-term shareholder value by selling non-integrated assets to
reduce leverage and improve our balance sheet," said John W.
Casella, chairman and CEO of Casella Waste Systems. "With the
closing of this divestiture we have made substantial progress
towards our debt reduction goals, and we are well positioned for
the future with a stronger balance sheet and a solid operating
platform."
*Non-GAAP Financial Measures For the twelve months ended October
31, 2010, the assets to be sold as part of this transaction
contributed $14.0 million consolidated Adjusted EBITDA which can be
reconciled to Net Income as follows, $10.3 million of Net Income
plus $4.2 million of Depreciation and Amortization less ($0.5)
million of Other (Income).
In addition to disclosing financial results prepared in
accordance with Generally Accepted Accounting Principles (GAAP),
the company also discloses earnings before interest, taxes,
depreciation and amortization, adjusted for accretion, depletion of
landfill operating lease obligations, severance and reorganization
charges, a goodwill impairment charge, an environmental remediation
charge as well as development project charges (Adjusted EBITDA)
which is a non-GAAP measure and can be reconciled to Net Income
(Loss).
We present Adjusted EBITDA because we consider it to be an
important supplemental measure of our performance and believe it is
frequently used by securities analysts, investors and other
interested parties in the evaluation of our results. Management
uses this non-GAAP measure to further understand our "core
operating performance." We believe our "core operating performance"
represents our on-going performance in the ordinary course of
operations. We believe that providing Adjusted EBITDA to investors,
in addition to corresponding income statement measures, provides
investors the benefit of viewing our performance using the same
financial metrics that the management team uses in making many key
decisions and understanding how the core business and its results
of operations may look in the future. We further believe that
providing this information allows our investors greater
transparency and a better understanding of our core financial
performance. In addition, the instruments governing our
indebtedness use a bank defined cash flow metric (Adjusted EBITDA
with additional adjustments) to measure our compliance with
covenants such as interest coverage, leverage and debt
incurrence.
Non-GAAP financial measures are not in accordance with, or an
alternative for, generally accepted accounting principles in the
U.S. Adjusted EBITDA should not be considered in isolation from or
as a substitute for financial information presented in accordance
with generally accepted accounting principles in the U.S., and may
be different from Adjusted EBITDA presented by other companies.
About Casella Waste Systems, Inc. Casella
Waste Systems, Inc., headquartered in Rutland, Vermont, provides
solid waste, recycling and resource management services in the
northeastern United States. For further information, contact Ned
Coletta, vice president of finance and investor relations at (802)
772-2239, or Ed Johnson, chief financial officer at (802) 772-2241,
or visit the company's website at http://www.casella.com.
Safe Harbor Statement Certain matters
discussed in this press release are "forward-looking statements"
intended to qualify for the safe harbors from liability established
by the Private Securities Litigation Reform Act of 1995. These
forward-looking statements can generally be identified as such by
the context of the statements, including words such as we
"believe," "expect," "anticipate," "plan," "may," "will," "would,"
"intend," "estimate" and other similar expressions, whether in the
negative or affirmative. These forward-looking statements are based
on current expectations, estimates, forecasts and projections about
the disposition and the industry and markets in which we operate
and management's beliefs and assumptions. We cannot guarantee that
we actually will achieve the plans, intentions or expectations
disclosed in the forward-looking statements made. Such
forward-looking statements, and all phases of our operations,
involve a number of risks and uncertainties, any one or more of
which could cause actual results to differ materially from those
described in our forward-looking statements. Such risks and
uncertainties include or relate to, among other things those
detailed in Item 1A, "Risk Factors" in our Form 10-K for the year
ended April 30, 2010.
We undertake no obligation to update publicly any
forward-looking statements whether as a result of new information,
future events or otherwise, except as required by law.
Ned Coletta (802) 772-2239 Ed Johnson (802) 772-2241
http://www.casella.com
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