Casella Waste Systems, Inc. (NASDAQ:CWST), a regional solid waste,
recycling and resource management services company, today reported
preliminary results for the three month period ended September 30,
2015.
Third Quarter Preliminary Financial
Highlights:
- Revenues were $146.2 million, up $4.3 million, or 3.0%,
from the same period in 2014.
- Operating Income was $12.7 million, up $2.1 million, or
19.5%, from the same period in 2014.
- Adjusted EBITDA* was $33.1 million, up $2.4 million, or
7.8%, from the same period in 2014.
- Net income attributable to common stockholders was $2.3
million, up $1.2 million, or 112.6%, from the same period in
2014.
- Free Cash Flow* was $0.8 million, up $7.0 million from
the same period in 2014.
“During our third quarter, we continued to execute well against
our key strategies of increasing landfill returns, improving
collection route profitability, creating incremental value through
resource solutions, reducing financial and operational risks, and
improving our balance sheet,” said John W. Casella, Chairman and
CEO of Casella Waste Systems.
“As a result, we continued to expand Adjusted EBITDA margins, up
roughly 100 bps year-over-year, and we used positive free cash flow
generated on a year-to-date basis to permanently repay debt during
the quarter,” Casella said. “We repurchased and permanently
retired $9.7 million of our 7.75% Senior Subordinated Notes due
2019 during the quarter, demonstrating our commitment to reduce
leverage and accelerate free cash flow generation by retiring our
highest cost debt.”
“From an operating standpoint, our solid waste pricing programs
continued to gain traction in the quarter with overall solid waste
pricing up 2.9%, driven by strong residential and commercial
pricing up 5.2% and higher pricing in the disposal
line-of-business,” Casella said. “These strong pricing gains
were complemented by further improvements in our operating
efficiency programs and our continued success implementing the
Sustainability Recycling Adjustment (SRA) fee to offset lower
recycling commodity prices.”
2015 Outlook
Given the solid performance year-to-date, the company reaffirms
its previously provided guidance for the year ending December 31,
2015 by estimating results in the following ranges:
- Revenues between $525 million and $535 million;
- Adjusted EBITDA* between $103 million and $107 million;
and
- Free Cash Flow* between $15 million and $19 million.
Conference call to discuss quarter
The company will release its financial results for the three
month period ended September 30, 2015 before the market opens on
Friday, October 23, 2015, and will host a conference call to
discuss these results at 10:00 a.m. Eastern Time on this same
morning. Individuals interested in participating in the call
should dial (877) 838-4153 or for international participants (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 company's website,
or by calling (855) 859-2056 or (404) 537-3406 (Conference ID
55444991) until 11:59 p.m. ET on Friday, October 30,
2015.
Miscellaneous
All statements and figures in this press release regarding third
quarter 2015 preliminary financial results, including, but not
limited to, statements and figures regarding Revenues, Operating
Income, Adjusted EBITDA and Free Cash Flow are preliminary and
remain subject to the completion of customary quarter-end
accounting procedures and adjustments, which could result in
changes to these preliminary financial results. In addition,
certain classifications and rounding may be different from our
financial results to be issued on October 23, 2015 and our
financial results to be published in our Form 10-Q for the three
and nine-month periods ended September 30, 2015.
We have prepared the preliminary financial results above, and
our independent registered public accounting firm has not audited,
reviewed, compiled or performed any procedures with respect to such
information. Although we currently expect that our final financial
results will be consistent with the preliminary financial results
reported above, these financial results are preliminary and
represent the most current information available to management.
Therefore, it is possible that our actual results may differ
materially from our preliminary results.
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, Chief Financial Officer at (802) 772-2239;
media should contact Joseph Fusco, Vice President at (802)
772-2247; or visit the company’s website at
http://www.casella.com.
*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, gains
on asset sales, development project charge write-offs, legal
settlement costs, tax settlement costs, bargain purchase gains,
asset impairment charges, environmental remediation charges,
severance and reorganization costs, (gains) expenses from
divestiture, acquisition and financing costs, gains on the
settlement of acquisition related contingent consideration, fiscal
year-end transition costs, proxy contest costs, as well as impacts
from divestiture transactions (“Adjusted EBITDA”) which is a
non-GAAP measure.
The company also discloses net cash provided by operating
activities, less capital expenditures (excluding acquisition
related capital expenditures), less payments on landfill operating
lease contracts, less assets acquired through financing leases,
plus proceeds from divestiture transactions, plus proceeds from the
sale of property and equipment, plus proceeds from property
insurance settlement, less contributions from (distributions to)
noncontrolling interest holders (“Free Cash Flow”), 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.
The company presents Adjusted EBITDA, and Free Cash Flow 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”
is helpful in understanding its ongoing performance in the ordinary
course of operations. The company believes that providing Adjusted
EBITDA and Free Cash Flow 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 has performed. 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.
Non-GAAP financial measures are not in accordance with or an
alternative for GAAP. 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, and may be
different from Adjusted EBITDA or Free Cash Flow presented by other
companies.
Safe Harbor Statement
Certain matters discussed in this press release, including, but
not limited to, the statements regarding preliminary financial
results, 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,” “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 financial results, 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: adverse
weather conditions that have negatively impacted and may continue
to negatively impact our revenues and our operating margin; current
economic conditions that have adversely affected and may continue
to adversely affect our revenues and our operating margin; we may
be unable to increase volumes at our landfills or improve our route
profitability; our need to service our indebtedness may limit our
ability to invest in our business; we may be unable to reduce costs
or increase pricing or volumes 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 energy pricing or the commodity pricing of our
recyclables may make it more difficult for us to predict our
results of operations or meet our estimates; we may incur
environmental charges or asset impairments in the future; and
actions of activist investors and the cost and disruption of
responding to those actions;. 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-KT for the transition period ended December 31, 2014
and in our Form 10-Q for the quarterly period ended June 30,
2015.
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.
http://www.casella.com
|
CASELLA WASTE SYSTEMS, INC. AND
SUBSIDIARIES |
RECONCILIATION OF CERTAIN NON-GAAP
MEASURES |
(Unaudited) |
(In thousands) |
|
|
|
|
|
|
|
|
Following is a reconciliation of Adjusted EBITDA to
Net Income: |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30, |
|
|
|
|
|
2015 |
|
|
|
2014 |
|
|
|
|
|
|
|
|
Net Income |
|
|
|
$ |
2,259 |
|
|
$ |
1,240 |
|
Provision for income taxes |
|
|
|
|
198 |
|
|
|
229 |
|
Other expense (income), net |
|
|
|
|
208 |
|
|
|
(286 |
) |
Interest expense, net |
|
|
|
|
10,031 |
|
|
|
9,440 |
|
Environmental remediation
charge |
|
|
|
|
- |
|
|
|
75 |
|
Depreciation and amortization |
|
|
|
|
16,385 |
|
|
|
15,787 |
|
Fiscal year-end transition
costs |
|
|
|
|
- |
|
|
|
336 |
|
Proxy contest costs |
|
|
|
|
507 |
|
|
|
- |
|
Depletion of landfill operating
lease obligations |
|
|
|
|
2,660 |
|
|
|
3,066 |
|
Interest accretion on
landfill and environmental remediation liabilities |
|
|
|
868 |
|
|
|
829 |
|
Adjusted EBITDA |
|
|
|
$ |
33,116 |
|
|
$ |
30,716 |
|
|
|
|
|
|
|
|
Following is a reconciliation of Free Cash Flow to Net
Cash Provided by Operating Activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September
30, |
|
|
|
|
|
2015 |
|
|
|
2014 |
|
Net Cash Provided By Operating Activities |
|
|
|
$ |
16,641 |
|
|
$ |
14,818 |
|
Capital
expenditures |
|
|
|
|
(14,727 |
) |
|
|
(19,709 |
) |
Payments on landfill
operating lease contracts |
|
|
|
|
(1,531 |
) |
|
|
(1,491 |
) |
Proceeds from sale of
property and equipment |
|
|
|
|
377 |
|
|
|
111 |
|
Free Cash
Flow |
|
|
|
$ |
760 |
|
|
$ |
(6,271 |
) |
|
|
|
|
|
Investors:
Ned Coletta
Chief Financial Officer
(802) 772-2239
Media:
Joseph Fusco
Vice President
(802) 772-2247
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