Casella Waste Systems, Inc. (NASDAQ: CWST), a regional solid waste,
recycling and resource management services company, today reported
financial results for its third quarter fiscal year 2011. For the
quarter ended January 31, 2011, revenues were $111.6 million, up
$1.7 million or 1.6 percent over the same quarter last year, driven
mainly by solid waste volume growth and higher commodity prices.
Operating income was $6.3 million for the quarter, down $1.1
million from the same quarter last year. The company's net loss
applicable to common shareholders was ($6.4) million, or ($0.24)
per common share for the quarter, compared to ($4.4) million, or
($0.17) per share for the same quarter last year. Adjusted EBITDA*
for the quarter was $22.4 million, down $1.6 million from same
quarter last year.
"While our third quarter results were below last year's
performance and our plan, the underperformance was mainly driven by
adverse weather and non-recurring events," said John W. Casella,
chairman and CEO of Casella Waste Systems. "The bad winter weather
during the quarter impacted operational performance, with lower
than projected productivity throughout the solid waste business and
lower waste volumes. Our landfill volumes were lower year-over-year
by 4.4 percent, with the negative variance attributable to reaching
annual permit limits at several key sites in early December and
lower volumes in January due to the bad weather."
"As expected in the quarter, the lower energy prices at Maine
Energy, the final closure of the Pine Tree landfill in Q3 fiscal
year 2010, and the sale of the Cape Cod assets in Q1 fiscal year
2011 led to a negative $0.6 million year-over-year Adjusted EBITDA
variance," Casella said. "Excluding these explainable negative
impacts and divestiture transaction costs in the quarter that were
not allocated to discontinued operations, Adjusted EBITDA was down
$0.8 million year-over-year."
"Since last quarter our team has done an excellent job
completing important long-term strategic goals aimed at improving
our balance sheet today and better positioning us for the future,"
Casella said. "These strategic accomplishments include:
- "We successfully divested our non-integrated recycling
facilities for $134.1 million, with net proceeds of approximately
$120.0 million used to permanently pay-off our Term Loan B.
- "We refinanced our $195.0 million 9.75% Senior Subordinated
Notes due 2013 with new $200.0 million 7.75% Senior Subordinated
Notes due 2019, yielding significant interest savings.
- "We acquired a municipal solid waste landfill in McKean County,
PA out of bankruptcy proceedings for $0.5 million in cash and the
assumption of certain contractual obligations."
Nine Months Financial Results
For the nine months ended January 31, 2011, revenues were $356.5
million, up $11.6 million or 3.4 percent over the same period last
year. Operating income was $31.2 million for the nine month period,
up $6.1 million from the same period last year, including a $3.5
million gain on sale of assets. The company's net loss applicable
to common shareholders was ($10.4) million, or ($0.40) per common
share for the nine month period, compared to ($8.7) million, or
($0.34) per share for the same period last year. Adjusted EBITDA
was $84.5 million for the nine month period, up $2.4 million from
same period last year. While the actual completion of the
divestiture of the non-integrated recycling assets occurred during
the fourth quarter on March 1, 2011, the third quarter and nine
month year to date results reflect discontinued operations
treatment for these assets in accordance with GAAP.
Fiscal 2011 Outlook
The following ranges reflect updated guidance for fiscal year
2011, including discontinued operations treatment for the
divestiture of the non- integrated recycling facilities in the
fourth quarter.
- Revenues between $460.0 million and $468.0 million;
- Adjusted EBITDA* between $102.0 million and $106.0 million;
and
- Capital expenditures between $51.0 million and $55.0
million.
In recognition of the value created through the successful
divestiture of the non-integrated recycling assets and the steps
taken to recapitalize our balance sheet at lower interest rates,
the board approved a $3.5 million discretionary bonus to
management, which is reflected in the above guidance. Management
will not receive a cash incentive bonus in addition to this
discretionary bonus for this fiscal year. Since bonuses were not
accrued for during the 9 months year-to-date period, the
discretionary bonus will be fully expensed in the fourth quarter.
We plan to announce fiscal year 2012 guidance on our year end
conference call in June.
*Non-GAAP Financial Measures
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. The company also discloses Free Cash
Flow, which is defined as net cash provided by operating
activities, less capital expenditures, less payments on landfill
operating leases, less assets acquired through financing leases,
plus proceeds from sales of property and equipment, which is a
non-GAAP measure. Adjusted EBITDA is reconciled to Net Income
(Loss), while Free Cash Flow is reconciled to Net Cash Provided by
Operating Activities.
We present Adjusted EBITDA and Free Cash Flow because we
consider them important supplemental measures of our performance
and believe they are frequently used by securities analysts,
investors and other interested parties in the evaluation of our
results. Management uses these non-GAAP measures 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 and Free Cash Flow to investors, in addition to
corresponding income statement and cash flow 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 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 and Free Cash Flow 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
or Free Cash Flow presented by other companies.
About Casella Waste Systems, Inc.
Casella Waste Systems, Inc., headquartered in Rutland, Vermont,
provides solid waste management services consisting of collection,
transfer, disposal, and recycling 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.
Conference call to discuss third
quarter
Casella will host a conference call to discuss these results on
Wednesday, March 2, 2011 at 10:00 a.m. ET. Individuals interested
in participating in the call should dial (877) 548-9590 or (720)
545-0037 at least 10 minutes before start time. The call will also
be webcast; to listen, participants should visit Casella Waste
Systems' website at http://ir.casella.com and follow the
appropriate link to the webcast. A replay of the call will be
available on the website, or by calling (800) 642-1687 or (706)
645-9291 (passcode 44979174) until 11:59 p.m. ET on Thursday, March
10, 2011.
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 "believe," "expect," "anticipate," "plan,"
"may," "will," "would," "intend," "estimate," "guidance" 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 industry and markets
in which we operate and management's beliefs and assumptions. We
cannot guarantee that we actually will achieve the plans,
intentions, expectations or guidance 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: current economic conditions that have adversely
affected and may continue to adversely affect our revenues and our
operating margin; we may be unable to reduce costs or increase
revenues sufficiently to achieve estimated Adjusted EBITDA and
other targets; landfill operations and permit status may be
affected by factors outside our control; we may be required to
incur capital expenditures in excess of our estimates; fluctuations
in the commodity pricing of our recyclables may make it more
difficult for us to predict our results of operations or meet our
estimates; and we may incur environmental charges or asset
impairments in the future. There are a number of other important
risks and uncertainties that could cause our actual results to
differ materially from those indicated by such forward-looking
statements. These additional risks and uncertainties include,
without limitation, 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.
CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except amounts per share)
Three Months Ended Nine Months Ended
---------------------- ----------------------
January 31, January 31, January 31, January 31,
2011 2010 2011 2010
---------- ---------- ---------- ----------
Revenues $ 111,627 $ 109,884 $ 356,515 $ 344,947
Operating expenses:
Cost of operations 76,933 73,724 237,584 226,986
General and administration 14,832 14,900 46,446 43,554
Depreciation and
amortization 13,573 13,850 44,776 49,327
Gain on sale of assets - - (3,502) -
---------- ---------- ---------- ----------
105,338 102,474 325,304 319,867
---------- ---------- ---------- ----------
Operating income 6,289 7,410 31,211 25,080
Other expense/(income), net:
Interest expense, net 12,174 12,520 36,603 33,657
(Gain) loss from equity
method investment (102) (73) 2,536 1,305
Loss on debt modification 115 - 115 511
Other income (78) (195) (490) (487)
---------- ---------- ---------- ----------
12,109 12,252 38,764 34,986
---------- ---------- ---------- ----------
Loss from continuing
operations before income
taxes and discontinued
operations (5,820) (4,842) (7,553) (9,906)
Provision for income taxes 1,079 572 2,139 941
---------- ---------- ---------- ----------
Loss from continuing
operations before
discontinued operations (6,899) (5,414) (9,692) (10,847)
Discontinued Operations:
Income from discontinued
operations, net of income
taxes (1) 1,902 799 1,255 1,814
(Loss) income on disposal
of discontinued
operations, net of income
taxes (1) (1,368) 239 (1,984) 328
---------- ---------- ---------- ----------
Net loss applicable to
common stockholders $ (6,365) $ (4,376) $ (10,421) $ (8,705)
========== ========== ========== ==========
Common stock and common
stock equivalent shares
outstanding, assuming
full dilution 26,115 25,748 26,026 25,705
========== ========== ========== ==========
Net loss per common share $ (0.24) $ (0.17) $ (0.40) $ (0.34)
========== ========== ========== ==========
Adjusted EBITDA (2) $ 22,408 $ 24,040 $ 84,487 $ 82,089
========== ========== ========== ==========
CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
January 31, April 30,
ASSETS 2011 2010
----------- ---------
CURRENT ASSETS:
Cash and cash equivalents $ 5,531 $ 2,035
Restricted cash 76 76
Accounts receivable - trade, net of allowance for
doubtful accounts 47,603 51,370
Other current assets 29,998 28,583
----------- ---------
Total current assets 83,208 82,064
Property, plant and equipment, net of accumulated
depreciation 455,265 457,670
Goodwill 100,430 100,430
Intangible assets, net 2,221 2,404
Restricted assets 317 228
Investments in unconsolidated entities 39,228 40,965
Other non-current assets 64,490 71,053
----------- ---------
Total assets $ 745,159 $ 754,814
=========== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt and capital
leases $ 2,411 $ 1,929
Current maturities of financing lease obligations 311 1,045
Accounts payable 34,859 35,056
Other accrued liabilities 49,263 52,050
----------- ---------
Total current liabilities 86,844 90,080
Long-term debt and capital leases, less current
maturities 562,998 556,130
Financing lease obligations, less current maturities 2,236 7,902
Other long-term liabilities 49,665 50,406
Stockholders' equity 43,416 50,296
----------- ---------
Total liabilities and stockholders' equity $ 745,159 $ 754,814
=========== =========
CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
Nine Months Ended
----------------------
January 31, January 31,
2011 2010
---------- ----------
Cash Flows from Operating Activities:
Net loss $ (10,421) $ (8,705)
(Income) from discontinued operations, net (1,255) (1,814)
Loss (income) on disposal of discontinued
operations, net 1,984 (328)
Adjustments to reconcile net loss to net cash
provided by operating activities -
Gain on sale of assets (3,502) -
Gain on sale of equipment (399) (1,099)
Depreciation and amortization 44,776 49,327
Depletion of landfill operating lease obligations 6,013 4,936
Interest accretion on landfill and environmental
remediation liabilities 2,487 2,668
Amortization of premium on senior notes (584) (540)
Amortization of discount on term loan and second
lien notes 1,650 1,141
Loss from equity method investments 2,536 1,305
Loss on debt modification 115 511
Stock-based compensation 2,052 1,598
Excess tax benefit on the vesting of stock
options (122) -
Deferred income taxes 1,827 2,016
Changes in assets and liabilities, net of
effects of acquisitions and divestitures (1,903) (7,314)
---------- ----------
54,946 54,549
---------- ----------
Net Cash Provided by Operating Activities 45,254 43,702
---------- ----------
Cash Flows from Investing Activities:
Additions to property, plant and equipment
- growth (1,175) (2,914)
- maintenance (40,268) (35,532)
Payments on landfill operating lease contracts (4,977) (7,803)
Proceeds from divestiture 7,533 -
Proceeds from sale of equipment 631 2,782
Investment in unconsolidated entities - (20)
---------- ----------
Net Cash Used In Investing Activities (38,256) (43,487)
---------- ----------
Cash Flows from Financing Activities:
Proceeds from long-term borrowings 134,100 450,644
Principal payments on long-term debt (132,957) (440,033)
Payment of financing costs (340) (14,072)
Proceeds from exercise of stock options 412 260
Excess tax benefit on the vesting of restricted
stock 122 -
---------- ----------
Net Cash Provided By (Used In) Financing
Activities 1,337 (3,201)
---------- ----------
Cash (Used In) Provided By Discontinued Operations (4,839) 3,319
---------- ----------
Net increase in cash and cash equivalents 3,496 333
Cash and cash equivalents, beginning of period 2,035 1,838
---------- ----------
Cash and cash equivalents, end of period $ 5,531 $ 2,171
========== ==========
Supplemental Disclosures:
Cash interest $ 32,381 $ 25,746
Cash income taxes, net of refunds $ 142 $ 345
CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(In thousands)
Note 1: Discontinued Operations
On January 23, 2011 we entered into a purchase and sale agreement and
related agreements to sell select non-integrated FCR recycling assets and
select intellectual property assets to a new company formed by Pegasus
Capital Advisors, L.P. and Intersection, LLC (the "Purchaser") for $134,100
in gross proceeds (the "FCR Divestiture"). This resulted in a loss on
disposal of discontinued operations (net of tax) of $1,404 and $2,020 in
the three and nine months ended January 31, 2011, respectively. Income from
discontinued operations (net of tax) for the three and nine months ended
January 31, 2011 and 2010 amounted to $2,115, $1,017, $2,098 and $2,152,
respectively.
We completed the divestiture of the assets of our FCR Trilogy Glass
operation in the third quarter of fiscal year 2011 for $1,840 in cash.
This resulted in a gain on disposal of discontinued operations amounting to
$36 (net of tax) in the three and nine months ended January 31, 2011. Loss
from discontinued operations (net of tax) for the three and nine months
ended January 31, 2011 and 2010 amounted to $213, $205, $844 and $551,
respectively.
In fiscal year 2010, we completed divestitures and closed operations
resulting in a gain on disposal of discontinued operations (net of tax)
amounting to $239 and $328 in the three and nine months ended January 31,
2010, respectively.
The operating results of these operations for the three and nine months
ended January 31, 2011 and 2010 have been reclassified from continuing to
discontinued operations in our consolidated financial statements. Revenues
and income before income tax benefit attributable to discontinued
operations for the three and nine months ended January 31, 2011 and 2010
are as follows:
Three Months Ended Nine Months Ended
January 31, January 31,
------------------- -------------------
2011 2010 2011 2010
--------- --------- -------- ---------
Revenues $ 20,159 $ 16,446 $ 56,122 $ 48,217
Income (loss) before income taxes $ 491 $ 1,397 $ (771) $ 3,215
--------- --------- -------- ---------
Note 2: Non - GAAP Financial Measures
In addition to disclosing financial results prepared in accordance with
Generally Accepted Accounting Principles (GAAP), we also disclose earnings
before interest, taxes, depreciation and amortization, adjusted for
accretion, depletion of landfill operating lease obligations, severance and
reorganization charges, goodwill impairment charges, environmental
remediation charges as well as development project charges (Adjusted
EBITDA) which is a non-GAAP measure. We also disclose Free Cash Flow,
which is defined as net cash provided by operating activities, less capital
expenditures, less payments on landfill operating leases, less assets
acquired through financing leases, plus proceeds from sales of property and
equipment, which is a non-GAAP measure. Adjusted EBITDA is reconciled to
Net loss, while Free Cash Flow is reconciled to Net Cash Provided by
Operating Activities.
We present Adjusted EBITDA and Free Cash Flow because we consider them
important supplemental measures of our performance and believe they are
frequently used by securities analysts, investors and other interested
parties in the evaluation of our results. Management uses these non-GAAP
measures 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
and Free Cash Flow to investors, in addition to corresponding income
statement and cash flow 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
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, GAAP in the U.S. Adjusted EBITDA and Free Cash Flow should not be
considered in isolation from or as a substitute for financial information
presented in accordance with GAAP in the U.S., and may be different from
Adjusted EBITDA or Free Cash Flow presented by other companies.
Following is a reconciliation of Adjusted EBITDA to Net Loss:
Three Months Ended Nine Months Ended
-------------------- --------------------
January January January January
31, 2011 31, 2010 31, 2011 31, 2010
--------- --------- --------- ---------
Net Loss Applicable to Common
Stockholders $ (6,365) $ (4,376) $ (10,421) $ (8,705)
Income from discontinued
operations, net (1,902) (799) (1,255) (1,814)
Loss (income) on disposal of
discontinued operations, net 1,368 (239) 1,984 (328)
Provision for income taxes 1,079 572 2,139 941
Interest expense, net 12,174 12,520 36,603 33,657
Depreciation and amortization 13,573 13,850 44,776 49,327
Other (income) expense, net (65) (268) 2,161 1,329
Severance and reorganization
charges - 78 - 78
Depletion of landfill
operating lease obligations 1,714 1,771 6,013 4,936
Interest accretion on landfill
and environmental remediation
liabilities 832 931 2,487 2,668
--------- --------- --------- ---------
Adjusted EBITDA (2) $ 22,408 $ 24,040 $ 84,487 $ 82,089
========= ========= ========= =========
Following is a reconciliation of Free Cash Flow to Net Cash Provided by
Operating Activities:
Three Months Ended Nine Months Ended
-------------------- --------------------
January January January January
31, 2011 31, 2010 31, 2011 31, 2010
--------- --------- --------- ---------
Net Cash Provided by Operating
Activities $ 8,804 $ 7,232 $ 45,254 $ 43,702
Capital expenditures (10,669) (6,284) (41,443) (38,446)
Payments on landfill operating
lease contracts (2,727) (3,265) (4,977) (7,803)
Proceeds from divestiture and
sale of property and equipment 143 285 8,164 2,782
Assets acquired through
financing leases - (404) - (404)
--------- --------- --------- ---------
Free Cash Flow (2) $ (4,449) $ (2,436) $ 6,998 $ (169)
========= ========= ========= =========
CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES
SUPPLEMENTAL DATA TABLES
(Unaudited)
(In thousands)
Amounts of our total revenues attributable to services provided for the
three and nine months ended January 31, 2011 and 2010 are as follows:
Three Months Ended January 31,
------------------------------------------
% of % of
Total Total
2011 Revenue 2010 Revenue
--------- --------- --------- ---------
Collection $ 48,068 43.0% $ 49,127 44.7%
Disposal 23,610 21.2% 23,992 21.8%
Power/LFGTE 7,170 6.4% 7,314 6.7%
Processing and recycling 13,962 12.5% 12,602 11.5%
--------- --------- --------- ---------
Solid waste operations 92,810 83.1% 93,035 84.7%
Major accounts 9,906 8.9% 9,414 8.5%
Recycling 8,911 8.0% 7,435 6.8%
--------- --------- --------- ---------
Total revenues $ 111,627 100.0% $ 109,884 100.0%
========= ========= ========= =========
Nine Months Ended January 31,
------------------------------------------
% of % of
Total Total
2011 Revenue 2010 Revenue
--------- --------- --------- ---------
Collection $ 152,628 42.8% $ 155,587 45.1%
Disposal 84,240 23.6% 82,367 23.9%
Power/LFGTE 19,156 5.4% 20,842 6.0%
Processing and recycling 43,424 12.2% 36,379 10.5%
--------- --------- --------- ---------
Solid waste operations 299,448 84.0% 295,175 85.5%
Major accounts 30,447 8.5% 28,901 8.4%
Recycling 26,620 7.5% 20,871 6.1%
--------- --------- --------- ---------
Total revenues $ 356,515 100.0% $ 344,947 100.0%
========= ========= ========= =========
Components of revenue growth for the three months ended January 31, 2011
compared to the three months ended January 31, 2010:
% of % of % of
Related Solid Waste Total
Amount Business Operations Company
--------- --------- --------- ---------
Solid Waste Operations:
Collection $ 238 0.5% 0.3% 0.2%
Disposal 171 0.7% 0.2% 0.2%
Power/LFGTE (314) -4.3% -0.4% -0.3%
Processing and recycling 59 0.5% 0.1% 0.0%
--------- --------- ---------
Solid Waste Yield 154 0.2% 0.1%
Volume 2,131 2.3% 1.9%
Commodity price & volume 147 0.2% 0.1%
Fuel surcharges 75 0.1% 0.1%
Acquisitions & divestitures (1,476) -1.6% -1.3%
Closed landfill (1,255) -1.4% -1.1%
--------- --------- ---------
Total Solid Waste (224) -0.2% -0.2%
========= ========= =========
Major Accounts 492 0.4%
========= =========
Recycling Operations: % of
Recycling
Operations
---------
Commodity price 2,075 27.9% 1.9%
Commodity volume (599) -8.0% -0.5%
--------- --------- ---------
Total Recycling 1,476 19.9% 1.4%
========= ========= =========
--------- ---------
Total Company $ 1,743 1.6%
========= =========
Solid Waste Internalization Rates by Region:
Three Months Ended Nine Months Ended
January 31, January 31,
-------------------- --------------------
2011 2010 2011 2010
--------- --------- --------- ---------
Eastern region 58.0% 61.0% 54.4% 52.5%
Central region 81.5% 78.7% 81.8% 77.5%
Western region 58.4% 65.1% 64.4% 68.4%
Solid waste internalization 65.6% 66.8% 65.2% 65.0%
CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES
SUPPLEMENTAL DATA TABLES
(Unaudited)
(In thousands)
GreenFiber Financial Statistics - as reported (1):
Three Months Ended Nine Months Ended
January 31, January 31,
------------------ ------------------
2011 2010 2011 2010
-------- -------- -------- --------
Revenues $ 28,470 $ 32,528 $ 66,488 $ 82,545
Net income (loss) 205 146 (5,071) (2,610)
Cash flow from operations 434 (749) (2,604) 5,241
Net working capital
changes (2,324) (3,719) (5,016) (1,092)
Adjusted EBITDA $ 2,758 $ 2,970 $ 2,412 $ 6,333
As a percentage of
revenue:
Net income (loss) 0.7% 0.4% -7.6% -3.2%
Adjusted EBITDA 9.7% 9.1% 3.6% 7.7%
(1) We hold a 50% interest in US Green Fiber, LLC ("GreenFiber"), a
joint venture that manufactures, markets and sells cellulose
insulation made from recycled fiber.
Components of Growth and Maintenance Capital Expenditures (1):
Three Months Ended Nine Months Ended
January 31, January 31,
------------------ -------------------
2011 2010 2011 2010
-------- -------- -------- ---------
Growth Capital
Expenditures:
Landfill Development $ 182 $ - $ 409 $ 1,026
Other 4 280 766 1,888
-------- -------- -------- ---------
Total Growth Capital
Expenditures 186 280 1,175 2,914
-------- -------- -------- ---------
Maintenance Capital Expenditures:
Vehicles, Machinery / Equipment
and Containers 4,390 904 14,677 8,794
Landfill Construction & Equipment 5,040 4,147 22,870 23,469
Facilities 704 737 1,852 2,586
Other 349 216 869 683
-------- -------- -------- ---------
Total Maintenance Capital
Expenditures 10,483 6,004 40,268 35,532
-------- -------- -------- ---------
Total Capital Expenditures $ 10,669 $ 6,284 $ 41,443 $ 38,446
======== ======== ======== =========
(1) Our capital expenditures are broadly defined as pertaining to either
growth or maintenance activities. Growth capital expenditures are defined
as costs related to development of new airspace, permit expansions, new
recycling contracts along with incremental costs of equipment and
infrastructure added to further such activities. Growth capital
expenditures include the cost of equipment added directly as a result of
new business as well as expenditures associated with increasing
infrastructure to increase throughput at transfer stations and recycling
facilities. Maintenance capital expenditures are defined as landfill cell
construction costs not related to expansion airspace, costs for normal
permit renewals and replacement costs for equipment due to age or
obsolescence.
CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except amounts per share)
Three Months Ended
----------------------------------------------------------
October July 31, April 30, January October July 31,
31, 2010 2010 2010 31, 2010 31, 2009 2009
-------- -------- -------- -------- -------- --------
Revenues $122,895 $121,992 $112,695 $109,884 $118,035 $117,028
Operating
expenses:
Cost of
operations 79,313 81,338 76,413 73,724 76,151 77,111
General and
administration 15,697 15,916 14,001 14,900 13,769 14,885
Depreciation
and
amortization 15,620 15,584 14,291 13,850 17,148 18,329
Gain on sale
of assets - (3,502) - - - -
Environmental
remediation
charge - - 335 - - -
110,630 109,336 105,040 102,474 107,068 110,326
-------- -------- -------- -------- -------- --------
Operating income 12,265 12,656 7,655 7,410 10,968 6,702
Other
expense/(income),
net:
Interest
expense, net 12,146 12,282 12,364 12,520 12,636 8,502
Loss (gain)
from equity
method
investment 506 2,132 1,385 (73) 159 1,219
Loss on debt
modification - - - - - 511
Other income (318) (94) (359) (195) (247) (45)
-------- -------- -------- -------- -------- --------
12,334 14,320 13,390 12,252 12,548 10,187
-------- -------- -------- -------- -------- --------
Loss from
continuing
operations
before income
taxes and
discontinued
operations (69) (1,664) (5,735) (4,842) (1,580) (3,485)
Provision for
income taxes 281 779 563 572 284 84
-------- -------- -------- -------- -------- --------
Loss from
continuing
operations
before
discontinued
operations (350) (2,443) (6,298) (5,414) (1,864) (3,569)
Discontinued
Operations:
(Loss) income
from discontinued
operations,
net of income
taxes (240) (407) 293 799 265 750
(Loss) income
on disposal
of discontinued
operations,
net of income
taxes (564) (51) 852 239 48 41
-------- -------- -------- -------- -------- --------
Net loss
applicable
to common
stockholders $ (1,154) $ (2,902) $ (5,153) $ (4,376) $ (1,551) $ (2,778)
======== ======== ======== ======== ======== ========
Common stock and
common stock
equivalent
shares
outstanding,
assuming full
dilution 26,058 25,905 25,810 25,748 25,733 25,688
======== ======== ======== ======== ======== ========
Net loss per
common share $ (0.04) $ (0.11) $ (0.20) $ (0.17) $ (0.06) $ (0.11)
======== ======== ======== ======== ======== ========
Adjusted EBITDA $ 30,804 $ 31,276 $ 25,158 $ 24,040 $ 30,539 $ 27,510
======== ======== ======== ======== ======== ========
Following is a reconciliation of Adjusted EBITDA to Net Loss:
Three Months Ended
----------------------------------------------------------
October July 31, April 30, January October July 31,
31, 2010 2010 2010 31, 2010 31, 2009 2009
-------- -------- -------- -------- -------- --------
Net Loss
Applicable to
Common Stock
Holders $ (1,154) $ (2,902) $ (5,153) $ (4,376) $ (1,551) $ (2,778)
Income from
discontinued
operations, net 240 407 (293) (799) (265) (750)
Loss (income)
on disposal of
discontinued
operations, net 564 51 (852) (239) (48) (41)
Provision for
income taxes 281 779 563 572 284 84
Interest
expense, net 12,146 12,282 12,364 12,520 12,636 8,502
Depreciation
and
amortization 15,620 15,584 14,291 13,850 17,148 18,329
Other expense
(income), net 188 2,038 1,026 (268) (88) 1,685
Environmental
remediation
charge - - 335 - - -
Severance and
reorganization
charges - - 107 78 - -
Depletion of
landfill
operating
lease
obligations 2,107 2,192 1,931 1,771 1,645 1,520
Interest
accretion on
landfill and
environmental
remediation
liabilities 812 844 839 931 778 959
-------- -------- -------- -------- -------- --------
Adjusted
EBITDA (2) $ 30,804 $ 31,276 $ 25,158 $ 24,040 $ 30,539 $ 27,510
======== ======== ======== ======== ======== ========
Ned Coletta (802) 772-2239 Ed Johnson (802) 772-2241
http://www.casella.com
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