Casella Waste Systems, Inc. (NASDAQ: CWST), a regional vertically
integrated solid waste, recycling and resource management services
company, announced today that it completed the sale of the property
containing its Maine Energy Recovery facility ("MERC") to the City
of Biddeford, ME ("Biddeford") on November 30, 2012.
As part of the transaction, Biddeford will pay the company total
consideration of $6.65 million over 21 years, enter into a new 10
year waste handling agreement, and enter into a new 10 year
recycling collection agreement. At closing, the company conveyed to
Biddeford the land (excluding any above grade improvements other
than the stack) and cellular leases related to antennae on the
stack.
The purchase and sale agreement allows for a post-sale
transition period, where the company has the option to operate MERC
for up to 6 months and the company has 12 months to dismantle all
facilities on the property except for the stack that houses the
cellular equipment. The company plans to cease operations at MERC
by the end of its third quarter fiscal 2013, and at that time begin
the process to dismantle the facility.
"In September, we began construction of a new transfer station
in Westbrook, Maine to handle the majority of the waste currently
disposed of at Maine Energy," said John W. Casella, chairman and
CEO of Casella Waste Systems. "We expect to complete construction
at Westbrook in late December, and to begin transferring waste
historically directed to Maine Energy, to other company landfills.
The sale of Maine Energy is expected to materially improve our
financial results, with consolidated Adjusted EBITDA margins
improving by roughly 70 basis points, and cash flows increasing by
roughly $5.6 million per year due to lower capital
expenditures."
The sale of MERC will not trigger discontinued operations
accounting treatment for the historical financial results. For the
twelve months ended April 30, 2012, MERC contributed revenues of
$20.8 million, Adjusted operating loss* of ($7.9) million, Adjusted
EBITDA* of $0.1 million, and capital expenditures of $5.7 million.
For the six months ended October 31, 2012, MERC contributed
revenues of $9.2 million, Adjusted operating loss of ($2.5)
million, Adjusted EBITDA of ($0.5) million, and capital
expenditures of $1.1 million. The company is investing
approximately $3.5 million of capital to build its new Westbrook
transfer station during its fiscal year 2013.
*Non-GAAP Financial Measures In addition
to disclosing financial results prepared in accordance with
Generally Accepted Accounting Principles in the United States
(GAAP), the company also discloses earnings before interest, taxes,
depreciation and amortization, adjusted for accretion, depletion of
landfill operating lease obligations, gain on sale of assets,
development project charge write-offs, legal settlement charges,
bargain purchase gains, asset impairment charges, environmental
remediation charges, as well as severance and reorganization
charges (Adjusted EBITDA) which is a non-GAAP measure. The company
also discloses loss before interest, taxes, adjusted for gain on
sale of assets, development project charge write-off, legal
settlement charges, bargain purchase gains, asset impairment
charges, environmental remediation charges, as well as severance
and reorganization charges (Adjusted Operating Loss) which is a
non-GAAP measure. Adjusted EBITDA and Adjusted Operating Loss are
reconciled to net income (loss).
The company presents Adjusted EBITDA and Adjusted Operating Loss
because it considers them important supplemental measures of its
performance and believes they are frequently used by securities
analysts, investors and other interested parties in the evaluation
of the company's results. Management uses these non-GAAP measures
to further understand the company's "core operating performance."
The company believes its "core operating performance" represents
its on-going performance in the ordinary course of operations. The
company believes that providing Adjusted EBITDA and Adjusted
Operating Loss to investors, in addition to corresponding income
statement and cash flow statement measures, affords investors the
benefit of viewing its 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. The company further believes that providing
this information allows its investors greater transparency and a
better understanding of its core financial performance. In
addition, the instruments governing the company's indebtedness use
EBITDA (with additional adjustments) to measure its 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. Adjusted EBITDA and Adjusted Operating Loss
should not be considered in isolation from or as a substitute for
financial information presented in accordance with GAAP, and may be
different from Adjusted EBITDA or Adjusted Operating Loss presented
by other companies.
Following is a reconciliation of Adjusted EBITDA and Adjusted Operating
Loss to Net Loss:
(Unaudited)
(in thousands)
Twelve months
Six months ended ended
----------------- ---------------
October 31, 2012 April 30, 2012
----------------- ---------------
Net Loss (2,866) (48,627)
Depreciation 2,046 7,991
Asset impairment charge - 40,746
Expense from divestiture 327 -
----------------- ---------------
Adjusted EBITDA (493) 110
Depreciation (2,046) (7,991)
----------------- ---------------
Adjusted Operating Loss (2,539) (7,881)
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, investors should contact Ned Coletta, vice
president of finance and investor relations at (802) 772-2239, and
media should contact Joseph Fusco, vice president at (802)
772-2247, 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 "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: we may be unable to begin operations
at Westbrook transfer station by the time we expect to close Maine
Energy; we may not receive a permit modification at the Juniper
Ridge landfill to accept MSW that is not a by-pass stream from
waste-to-energy facilities; the scrap value of Maine Energy may not
exceed the costs to dismantle the facility as directed by the
purchase and sale agreement; we may not fully yield the financial
benefits of closing Maine Energy because of economic or competitive
factors outside our control, or of unanticipated closing or related
costs. 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, 2012.
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.
Investors: Ned Coletta Vice President of Finance and Investor
Relations (802) 772-2239
Media: Joseph Fusco Vice President (802) 772-2247
http://www.casella.com
Investors: Ned Coletta Vice President of Finance and Investor
Relations (802) 772-2239 Media: Joseph Fusco Vice President (802)
772-2247 http://www.casella.com
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