Casella Waste Systems, Inc. (NASDAQ: CWST), a regional solid waste,
recycling and resource management services company, today reported
its financial results for the three month period ended September
30, 2019.
Third Quarter and Year-To-Date
Highlights:
- Revenues were $198.5 million for the quarter, up $25.7
million, or up 14.9%, from the same period in 2018.
- Overall solid waste pricing for the quarter was up
5.3%, driven by robust collection pricing, up 5.2%, and strong
landfill pricing, up 6.6%, from the same period in
2018.
- Net income was $12.4 million for the quarter, down
$(9.9) million, or down (44.5)%, from the same period in
2018.
- Adjusted Net Income* was $17.7 million for the quarter,
up $4.3 million, or up 32.4%, from the same period in
2018.
- Adjusted EBITDA* was $48.4 million for the quarter, up
$6.0 million, or up 14.1%, from the same period in
2018.
- The Company raises its revenue and net cash provided by
operating activities guidance ranges, lowers its net income
guidance range and tightens its Adjusted EBITDA
and Normalized Free Cash Flow* guidance ranges for the fiscal year
ending December 31, 2019 (“fiscal 2019”).
- The Company has acquired approximately $52 million of
annualized revenues year-to-date, exceeding its $20 million to $40
million target range for 2019.
“We had another solid quarter, as we continued to execute well
against our key strategies as part of our 2021 plan,” said John W.
Casella, Chairman and CEO of Casella Waste Systems, Inc. “We remain
focused on driving cash flow growth by increasing landfill returns,
improving collection profitability, creating incremental value
through resource solutions, using technology to drive profitable
growth and efficiencies, and prudently allocating capital for
strategic growth.”
“We continue to make substantial progress executing against our
strategic growth initiative, as we have acquired approximately $52
million of annualized revenues year-to-date, including the four
acquisitions that we closed on during the third quarter," Casella
said. "We are focused on acquiring well run businesses in strategic
markets that will drive additional internalization to our landfills
and enhance operating synergies. In addition to robust organic
growth, we expect revenue growth of roughly 4.0% in 2020 from the
roll-over impact of acquisitions already completed in 2019. Our
acquisition pipeline remains robust, and we believe that there is
continued opportunity to drive additional cash flow growth across
our footprint through the sustained execution against our growth
strategy.”
“Our solid waste pricing programs were ahead of budget again in
the third quarter as we advanced 5.2% pricing in the collection
line-of-business and 6.6% pricing at the landfills, with overall
solid waste price of 5.3%,” Casella said. “Solid waste volumes were
down -0.1% in the quarter, with collection volumes down as we
continued to focus on shedding unprofitable work and advancing
pricing in excess of heightened inflation. Disposal volumes were up
1.6% year-over-year as we further ramped landfill volumes to take
advantage of higher priced materials through the summer months.
Unfortunately, we were unable to ramp up volumes at the Chemung
landfill until late September due to landfill construction delays.
While this delay negatively impacted results in the third quarter
and fiscal 2019, we expect to increase volumes and maximize our
annual permit in 2020."
“As announced in early September, we received an important
permit expansion at our Waste USA landfill located in Coventry,
Vermont,” Casella said. “This expansion will increase the lined
disposal area by 51.2 acres, or by approximately 13.7 million cubic
yards, which will create approximately 20 years of additional
airspace at the current run-rate. We continue to make great
progress advancing permitting and development activities at several
other key sites.”
“Operating income was up again in the recycling business despite
commodity prices being down -24.8% year-over-year,” Casella said.
“Our SRA fee, revenue share contracts and contamination fees
combined with our efforts to produce higher quality materials and
manage processing costs have allowed us to improve recycling
financial performance and off-take commodity risk in a challenging
pricing environment.”
For the quarter, revenues were $198.5 million, up $25.7 million,
or 14.9%, from the same period in 2018, with revenue growth mainly
driven by: robust collection and disposal pricing; the roll-over
impact from acquisitions; higher disposal, recycling, organics and
customer solutions volumes; and higher recycling processing fees;
partially offset by lower collection volumes; the closure of the
Southbridge Landfill; and lower recycling commodity prices.
The third quarter included: $1.1 million of expense from
acquisition activities and other items; $0.6 million of legal and
other expenses associated with the Southbridge Landfill closure;
and $3.6 million of withdrawal costs from a multi-employer pension
plan. The withdrawal from this pension plan was a positive step for
the Company as we limited the on-going financial risks associated
the multi-employer plan and exited the plan for approximately a
significant discount to the stated withdrawal liability.
The same quarter last year included: a $10.0 million recovery
related to the Southbridge Landfill environmental insurance
settlement, partially offset by $0.5 million of legal expenses
associated with the Southbridge Landfill closure; and $0.6 million
of expense from acquisition activities and other items.
Net income was $12.4 million for the quarter, or $0.26 per
diluted common share for the quarter, as compared to net income of
$22.3 million, or $0.50 per diluted common share for the same
period in 2018. Adjusted Net Income was $17.7 million for the
quarter, or Adjusted Diluted Earnings Per Common Share* of $0.37
for the quarter, as compared to Adjusted Net Income of $13.4
million, or Adjusted Diluted Earnings Per Common Share of $0.30 for
the same period in 2018.
Operating income was $18.5 million for the quarter, down $(10.4)
million from the same period in 2018. Adjusted Operating Income*
was $23.8 million for the quarter, up $3.8 million from the same
period in 2018. Adjusted EBITDA was $48.4 million for the quarter,
up $6.0 million from the same period in 2018, with strength across
almost all lines-of-business.
For the nine months ended September 30, 2019, revenues were
$549.7 million, up $63.7 million, or 13.1%, from the same period in
2018.
Net income was $22.6 million, or $0.47 per diluted common share
year-to-date, as compared to net income of $20.1 million, or $0.46
per diluted common share for the same period in 2018. Adjusted Net
Income was $30.4 million, or $0.64 per diluted common share
year-to-date, as compared to $23.0 million, or $0.52 per diluted
common share for the same period in 2018.
Operating income was $38.5 million year-to-date, down $(6.4)
million from the same period in 2018. Adjusted Operating Income was
$46.4 million year-to-date, up $5.9 million from the same period in
2018. Adjusted EBITDA was $115.4 million year-to-date, up $11.3
million from the same period in 2018.
Net cash provided by operating activities was $71.5 million
year-to-date, as compared to $89.9 million for the same period in
2018, with the reduction year-over-year mainly due to: timing
differences in cash receipts associated with accounts receivable
and cash outflows associated with accounts payable that are
expected to normalize through the remainder of the fiscal year; the
adoption of Accounting Standards Codification ("ASC") Topic 842,
Leases on January 1, 2019, which shifted payments on landfill
operating lease contracts from an investing activity to an
operating activity on the statement of cash flows, with this change
only impacting the financial statement classification of this cash
outflow; and a reduction in accrued liabilities due to cash
outflows associated with the remediation project at a former scrap
yard owned by one of our subsidiaries in Potsdam, New York and the
Southbridge Landfill closure.
Normalized Free Cash Flow was $24.1 million year-to-date, as
compared to $37.3 million for the same period in 2018.
Normalized Free Cash Flow year-to-date included the following
adjustments: $11.1 million of landfill closure, site improvement
and remediation expenditures associated with the Potsdam
remediation project and the Southbridge Landfill closure; $2.2
million of cash outlays related to acquisition activities and other
items; $2.6 million of cash outlays associated with the Waste USA
landfill expansion; and $11.9 million of capital expenditures
primarily related to acquisitions.
Outlook
“Given the strength in our solid waste, recycling, and customer
solutions operations combined with the expected contribution from
the acquisitions we have completed year-to-date, we are updating
our guidance ranges for fiscal 2019,” Casella said.
The Company updated guidance for fiscal 2019 by estimating
results in the following ranges:
- Revenues between $735 million and $745 million (raised from
$720 million and $735 million);
- Net income between $31 million and $34 million (lowered from
$35 million and $39 million);
- Adjusted EBITDA between $154 million and $157 million (updated
from $153 million and $157 million);
- Net cash provided by operating activities between $114 million
and $117 million (raised from $111 million and $115 million);
and
- Normalized Free Cash Flow between $52 million and $55 million
(updated from $51 million and $55 million).
Adjusted EBITDA and Normalized Free Cash Flow related to fiscal
2019 are described in the Reconciliation of 2019 Outlook Non-GAAP
Measures section of this press release. Net income and Net
cash provided by operating activities are provided as the most
directly comparable GAAP measures to Adjusted EBITDA and Normalized
Free Cash Flow, respectively, however these forward-looking
estimates for fiscal 2019 do not contemplate any unanticipated or
non-recurring impacts.
Conference call to discuss quarter
The Company will host a conference call to discuss these results
on Friday, November 1, 2019 at 9:00 a.m. Eastern Time.
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 Conference ID is 839 5638
for the call and the replay.
The call will also be webcast; to listen, participants should
visit the company’s 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 839 5638).
About Casella Waste Systems, Inc.
Casella Waste Systems, Inc., headquartered in Rutland, Vermont,
provides resource management expertise and services to residential,
commercial, municipal and industrial customers, primarily in the
areas of solid waste collection and disposal, transfer, recycling
and organics services in the northeastern United States. For
further information, investors contact Ned Coletta, Chief Financial
Officer at (802) 772-2239; media 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 GAAP, the Company also discloses earnings before
interest, taxes, and depreciation and amortization, adjusted for
accretion, depletion of landfill operating lease obligations, the
Southbridge Landfill closure (settlement) charge, net, gains on
asset sales, development project charges, contract settlement
charges, legal settlement costs, tax settlement costs, bargain
purchase gains, asset impairment charges, environmental remediation
charges, severance and reorganization costs, expense from
acquisition activities and other items, gains on the settlement of
acquisition related contingent consideration, proxy contest costs,
withdrawal costs - multiemployer pension plan, as well as impacts
from divestiture transactions (“Adjusted EBITDA”), which is a
non-GAAP financial measure.
The Company also discloses earnings before interest and taxes,
adjusted for the Southbridge Landfill closure (settlement) charge,
net, gains on asset sales, development project charges, contract
settlement charges, legal settlement costs, tax settlement costs,
bargain purchase gains, asset impairment charges, environmental
remediation charges, severance and reorganization costs, expense
from acquisition activities and other items, gains on the
settlement of acquisition related contingent consideration, proxy
contest costs, withdrawal costs - multiemployer pension plan, as
well as impacts from divestiture transactions (“Adjusted Operating
Income”), which is a non-GAAP financial measure.
The Company also discloses net income (loss), adjusted for the
U.S. tax reform impact, the Southbridge Landfill closure
(settlement) charge, net, gains on asset sales, development project
charges, contract settlement charges, legal settlement costs, tax
settlement costs, bargain purchase gains, asset impairment charges,
environmental remediation charges, severance and reorganization
costs, expense from acquisition activities and other items, gains
on the settlement of acquisition related contingent consideration,
proxy contest costs, withdrawal costs - multiemployer pension plan,
impacts from divestiture transactions, losses on debt modifications
and extinguishments, as well as impairment of investments
("Adjusted Net Income (Loss)"), which is a non-GAAP financial
measure.
The Company also discloses Adjusted Diluted Earnings (Loss) Per
Common Share, which is Adjusted Net Income (Loss) divided by
Adjusted Diluted Weighted Average Shares Outstanding, which
includes the dilutive effect of options and restricted /
performance stock units. Adjusted Diluted Earnings (Loss) Per
Common Share is a non-GAAP financial measure.
The Company also discloses net cash provided by operating
activities, less capital expenditures, less payments on landfill
operating lease contracts, plus proceeds from divestiture
transactions, plus proceeds from the sale of property and
equipment, plus proceeds from property insurance settlement, plus
(less) contributions from (distributions to) noncontrolling
interest holders (“Free Cash Flow”), which is a non-GAAP financial
measure.
The Company also discloses Free Cash Flow plus (less) certain
cash outflows (inflows) associated with landfill closure, site
improvement and remediation, plus certain cash outflows associated
with new contract and project capital expenditures, plus certain
cash outflows associated with contract settlement costs, plus
certain cash outflows associated with expense from acquisition
activities and other items, plus certain cash outflows associated
with capital expenditures related to acquisitions or assumption of
new customers from a distressed or defunct market participant, plus
(less) cash outflows (inflows) associated with certain business
dissolutions, plus cash interest outflows associated with the
timing of refinancing transactions, plus cash outflows associated
with Waste USA landfill phase VI construction (“Normalized Free
Cash Flow”), which is a non-GAAP financial measure.
The Company also discloses net cash provided by operating
activities, plus changes in assets and liabilities, net of effects
of acquisitions and divestitures, gains on sale of property and
equipment, expense from acquisition activities and other items,
withdrawal costs - multiemployer pension plan, environmental
remediation charges, losses on debt modifications and
extinguishments, stock based compensation expense, development
project charges, the non-cash Southbridge Landfill closure charge
(settlement), net, impairment of investment, operating lease
right-of-use assets expense, interest expense - less amortization,
provisions for income taxes, net of deferred taxes, and adjustments
as allowed by the Company's credit facility agreement
("Consolidated EBITDA") and total long-term debt and finance
leases, less unencumbered cash and cash equivalents in excess of
$2.0 million ("Consolidated Funded Debt, Net" and, divided by
Consolidated EBITDA, the "Consolidated Net Leverage Ratio"), which
are non-GAAP financial measures.
Adjusted EBITDA, Adjusted Operating Income and Adjusted Net
Income (Loss) are reconciled to net income (loss); Adjusted Diluted
Earnings (Loss) Per Common Share is reconciled to diluted earnings
per common share; Free Cash Flow, Normalized Free Cash Flow and
Consolidated EBITDA are reconciled to net cash provided by
operating activities; and Consolidated Funded Debt, Net is
reconciled to total long-term debt and finance leases.
The Company presents Adjusted EBITDA, Adjusted Operating Income,
Adjusted Net Income (Loss), Adjusted Diluted Earnings (Loss) Per
Common Share, Free Cash Flow, Normalized Free Cash Flow,
Consolidated EBITDA, Consolidated Funded Debt, Net and the
Consolidated Net Leverage Ratio 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 financial measures to further
understand its “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, Adjusted Operating
Income, Adjusted Net Income (Loss), Adjusted Diluted Earnings
(Loss) Per Common Share, Free Cash Flow, Normalized Free Cash Flow,
Consolidated EBITDA, Consolidated Funded Debt, Net and the
Consolidated Net Leverage Ratio 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.
Non-GAAP financial measures are not in accordance with or an
alternative for GAAP. Adjusted EBITDA, Adjusted Operating Income,
Adjusted Net Income (Loss), Adjusted Diluted Earnings (Loss) Per
Common Share, Free Cash Flow, Normalized Free Cash Flow,
Consolidated EBITDA, Consolidated Funded Debt, Net and the
Consolidated Net Leverage Ratio 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, Adjusted Operating Income, Adjusted Net Income
(Loss), Adjusted Diluted Earnings (Loss) Per Common Share, Free
Cash Flow, Normalized Free Cash Flow, Consolidated EBITDA,
Consolidated Funded Debt, Net and the Consolidated Net Leverage
Ratio presented by other companies.
Safe Harbor Statement
Certain matters discussed in this press release, including, but
not limited to, the statements regarding our intentions, beliefs or
current expectations concerning, among other things, our financial
performance; financial condition; operations and services;
prospects; growth; strategies; and guidance for fiscal 2019, 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,” "will,"
“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 the Company operates and
management’s beliefs and assumptions. The Company cannot guarantee
that it 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 the Company's 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 its
forward-looking statements.
Such risks and uncertainties include or relate to, among other
things: policies adopted by China as part of its “National Sword”
program that will restrict imports of recyclable materials into
China and have had a material impact on the Company’s financial
results; the capping and closure of the Southbridge Landfill and
the pending litigation relating to the Southbridge Landfill, the
lawsuit relating to odors at the Ontario County Landfill, and the
lawsuit relating to the North Country Landfill could result in
material unexpected costs; adverse weather conditions may
negatively impact the Company's revenues and its operating margin;
the Company may be unable to increase volumes at its landfills or
improve its route profitability; the Company's need to service its
indebtedness may limit its ability to invest in its business; the
Company 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 the Company's control; the Company may be required
to incur capital expenditures in excess of its estimates;
fluctuations in energy pricing or the commodity pricing of its
recyclables may make it more difficult for the Company to predict
its results of operations or meet its estimates; the Company may be
unable to achieve its acquisition or development targets on
favorable pricing or at all; and the Company may incur
environmental charges or asset impairments in the future.
There are a number of other important risks and uncertainties
that could cause the Company's 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 the Company's
Form 10-K for the fiscal year ended December 31, 2018, and in
other filings that the Company may make with the Securities and
Exchange Commission in the future.
The Company undertakes 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 ColettaChief Financial Officer(802) 772-2239
Media:
Joseph FuscoVice President(802)
772-2247http://www.casella.com
CASELLA WASTE SYSTEMS, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(Unaudited)(In
thousands, except for per share data)
|
Three Months Ended September
30, |
|
Nine Months Ended September
30, |
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
Revenues |
$ |
198,547 |
|
|
$ |
172,832 |
|
|
$ |
549,670 |
|
|
$ |
485,936 |
|
Operating expenses: |
|
|
|
|
|
|
|
Cost of operations |
131,273 |
|
|
114,118 |
|
|
377,707 |
|
|
331,527 |
|
General and administration |
22,536 |
|
|
20,545 |
|
|
67,423 |
|
|
62,365 |
|
Depreciation and amortization |
20,940 |
|
|
18,202 |
|
|
58,144 |
|
|
51,572 |
|
Withdrawal costs - multiemployer pension plan |
3,591 |
|
|
— |
|
|
3,591 |
|
|
— |
|
Expense from acquisition activities and other items |
1,097 |
|
|
581 |
|
|
2,237 |
|
|
930 |
|
Southbridge landfill closure charge (settlement), net |
625 |
|
|
(9,498 |
) |
|
2,097 |
|
|
(7,740 |
) |
Contract settlement charge |
— |
|
|
— |
|
|
— |
|
|
2,100 |
|
Development project charge |
— |
|
|
— |
|
|
— |
|
|
311 |
|
|
180,062 |
|
|
143,948 |
|
|
511,199 |
|
|
441,065 |
|
Operating income |
18,485 |
|
|
28,884 |
|
|
38,471 |
|
|
44,871 |
|
Other expense (income): |
|
|
|
|
|
|
|
Interest expense, net |
6,169 |
|
|
6,371 |
|
|
18,562 |
|
|
19,186 |
|
Loss on debt extinguishment |
— |
|
|
— |
|
|
— |
|
|
7,352 |
|
Other income |
(248 |
) |
|
(166 |
) |
|
(960 |
) |
|
(597 |
) |
Other expense, net |
5,921 |
|
|
6,205 |
|
|
17,602 |
|
|
25,941 |
|
Income before income
taxes |
12,564 |
|
|
22,679 |
|
|
20,869 |
|
|
18,930 |
|
Provision (benefit) for income
taxes |
178 |
|
|
377 |
|
|
(1,718 |
) |
|
(1,166 |
) |
Net income |
$ |
12,386 |
|
|
$ |
22,302 |
|
|
$ |
22,587 |
|
|
$ |
20,096 |
|
Basic weighted average common
shares outstanding |
47,690 |
|
|
42,779 |
|
|
47,029 |
|
|
42,605 |
|
Basic earnings per common
share |
$ |
0.26 |
|
|
$ |
0.52 |
|
|
$ |
0.48 |
|
|
$ |
0.47 |
|
Diluted weighted average common
shares outstanding |
48,361 |
|
|
44,175 |
|
|
47,660 |
|
|
43,938 |
|
Diluted earnings per common
share |
$ |
0.26 |
|
|
$ |
0.50 |
|
|
$ |
0.47 |
|
|
$ |
0.46 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASELLA WASTE SYSTEMS, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE
SHEETS(In thousands)
|
September 30, 2019 |
|
December 31, 2018 |
ASSETS |
(Unaudited) |
|
|
CURRENT ASSETS: |
|
|
|
Cash and cash equivalents |
$ |
5,028 |
|
$ |
4,007 |
|
Accounts receivable, net of allowance for doubtful accounts |
89,882 |
|
74,937 |
|
Other current assets |
18,881 |
|
18,149 |
|
Total current assets |
113,791 |
|
97,093 |
|
Property, plant and equipment,
net of accumulated depreciation and amortization |
434,081 |
|
404,577 |
|
Operating lease right-of-use
assets |
109,604 |
|
— |
|
Goodwill |
184,295 |
|
162,734 |
|
Intangible assets, net of
accumulated amortization |
60,983 |
|
34,767 |
|
Restricted assets |
1,410 |
|
1,248 |
|
Cost method investments |
11,264 |
|
11,264 |
|
Deferred income taxes |
8,840 |
|
9,594 |
|
Other non-current assets |
11,512 |
|
11,133 |
|
Total assets |
$ |
935,780 |
|
$ |
732,410 |
|
LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIT) |
|
|
|
CURRENT LIABILITIES: |
|
|
|
Current maturities of long-term debt and finance leases |
$ |
3,571 |
|
$ |
2,298 |
|
Current operating lease liabilities |
9,582 |
|
— |
|
Accounts payable |
59,370 |
|
57,289 |
|
Other accrued liabilities |
54,436 |
|
51,910 |
|
Total current liabilities |
126,959 |
|
111,497 |
|
Long-term debt and finance
leases, less current portion |
523,975 |
|
542,001 |
|
Operating lease liabilities, less
current portion |
71,910 |
|
— |
|
Other long-term liabilities |
102,124 |
|
94,744 |
|
Total stockholders' equity
(deficit) |
110,812 |
|
(15,832 |
) |
Total liabilities and stockholders' equity (deficit) |
$ |
935,780 |
|
$ |
732,410 |
|
|
|
|
|
|
|
|
CASELLA WASTE SYSTEMS, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS(Unaudited)(In
thousands)
|
Nine Months Ended September
30, |
|
2019 |
|
|
2018 |
|
Cash Flows from Operating
Activities: |
|
|
|
Net income |
$ |
22,587 |
|
|
$ |
20,096 |
|
Adjustments to reconcile net
income to net cash provided by operating activities: |
|
|
|
Depreciation and amortization |
58,144 |
|
|
51,572 |
|
Depletion of landfill operating lease obligations |
5,580 |
|
|
7,827 |
|
Interest accretion on landfill and environmental remediation
liabilities |
5,310 |
|
|
4,291 |
|
Amortization of debt issuance costs and discount on long-term
debt |
1,724 |
|
|
1,875 |
|
Stock-based compensation |
5,218 |
|
|
6,366 |
|
Operating lease right-of-use assets expense |
7,272 |
|
|
— |
|
Gain on sale of property and equipment |
(806 |
) |
|
(414 |
) |
Southbridge Landfill non-cash closure charge (1) |
58 |
|
|
1,354 |
|
Southbridge Landfill insurance recovery for investing
activities |
— |
|
|
(3,506 |
) |
Development project charge |
— |
|
|
311 |
|
Non-cash expense from acquisition activities and other items |
71 |
|
|
211 |
|
Loss on debt extinguishment |
— |
|
|
7,352 |
|
Withdrawal costs - multiemployer pension plan |
3,591 |
|
|
— |
|
Deferred income taxes |
(1,267 |
) |
|
79 |
|
Changes in assets and liabilities, net of effects of acquisitions
and divestitures |
(35,987 |
) |
|
(7,497 |
) |
Net cash provided by operating activities |
71,495 |
|
|
89,917 |
|
Cash Flows from Investing
Activities: |
|
|
|
Acquisitions, net of cash acquired |
(73,496 |
) |
|
(58,176 |
) |
Additions to property, plant and equipment |
(75,998 |
) |
|
(51,841 |
) |
Payments on landfill operating lease contracts |
— |
|
|
(5,006 |
) |
Proceeds from sale of property and equipment |
542 |
|
|
609 |
|
Proceeds from Southbridge Landfill insurance recovery for investing
activities |
— |
|
|
3,506 |
|
Proceeds from property insurance settlement |
332 |
|
|
992 |
|
Net cash used in investing activities |
(148,620 |
) |
|
(109,916 |
) |
Cash Flows from Financing
Activities: |
|
|
|
Proceeds from long-term borrowings |
121,500 |
|
|
566,800 |
|
Principal payments on long-term debt |
(149,774 |
) |
|
(540,611 |
) |
Payments of debt issuance costs |
— |
|
|
(5,573 |
) |
Proceeds from the exercise of share based awards |
3,355 |
|
|
471 |
|
Proceeds from the public issuance of Class A Common Stock |
100,446 |
|
|
— |
|
Proceeds from unregistered sale of Class A Common Stock |
2,619 |
|
|
— |
|
Net cash provided by financing activities |
78,146 |
|
|
21,087 |
|
Net increase in cash and cash
equivalents |
1,021 |
|
|
1,088 |
|
Cash and cash equivalents,
beginning of period |
4,007 |
|
|
1,995 |
|
Cash and cash equivalents, end of
period |
$ |
5,028 |
|
|
$ |
3,083 |
|
Supplemental Disclosure of Cash
Flow Information: |
|
|
|
Cash interest |
$ |
17,200 |
|
|
$ |
16,950 |
|
Cash income taxes, net of refunds |
$ |
84 |
|
|
$ |
84 |
|
Supplemental Disclosure of
Non-Cash Investing and Financing Activities: |
|
|
|
Non-current assets obtained through long-term obligations |
$ |
9,797 |
|
|
$ |
4,342 |
|
Contingent consideration from business combinations |
$ |
— |
|
|
$ |
2,924 |
|
CASELLA WASTE SYSTEMS, INC. AND
SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED
FINANCIAL
STATEMENTS(Unaudited)(In
thousands)
Note 1: Southbridge Landfill Closure Charge
(Settlement), Net
In June 2017, we initiated the plan to cease operations of our
Southbridge Landfill and later closed it in November 2018 when
Southbridge Landfill reached its final capacity. Accordingly, in
the three and nine months ended September 30, 2019 and 2018,
we recorded charges (settlement) associated with the closure of our
Southbridge Landfill as follows:
|
Three Months Ended September
30, |
|
Nine Months Ended September
30, |
|
2019 |
|
2018 |
|
|
2019 |
|
2018 |
|
Charlton settlement charge (i) |
$ |
— |
|
$ |
— |
|
|
$ |
— |
|
$ |
1,216 |
|
Legal and other costs (ii) |
625 |
|
502 |
|
|
2,097 |
|
1,044 |
|
Recovery on insurance settlement
(iii) |
— |
|
(10,000 |
) |
|
— |
|
(10,000 |
) |
Southbridge Landfill closure
charge (settlement), net |
$ |
625 |
|
$ |
(9,498 |
) |
|
$ |
2,097 |
|
$ |
(7,740 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(i) We established a reserve associated with settlement of
the Town of Charlton's claim against us. (ii) We incurred
legal costs as well as other costs associated with various matters
as part of the Southbridge Landfill closure. (iii) We recorded
a recovery on an environmental insurance settlement associated with
the Southbridge Landfill closure.
CASELLA WASTE SYSTEMS, INC. AND
SUBSIDIARIESRECONCILIATION OF CERTAIN NON-GAAP
MEASURES(Unaudited)(In
thousands)
Following is a reconciliation of Adjusted EBITDA and
Adjusted Operating Income from Net
income:
|
Three Months Ended September
30, |
|
Nine Months Ended September
30, |
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
Net income |
$ |
12,386 |
|
|
$ |
22,302 |
|
|
$ |
22,587 |
|
|
$ |
20,096 |
|
Net income as a
percentage of revenues |
|
6.2% |
|
|
|
12.9% |
|
|
|
4.1% |
|
|
|
4.1% |
|
Provision (benefit) for income taxes |
178 |
|
|
377 |
|
|
(1,718 |
) |
|
(1,166 |
) |
Other income |
(248 |
) |
|
(166 |
) |
|
(960 |
) |
|
(597 |
) |
Loss on debt extinguishment |
— |
|
|
— |
|
|
— |
|
|
7,352 |
|
Interest expense, net |
6,169 |
|
|
6,371 |
|
|
18,562 |
|
|
19,186 |
|
Development project charge |
— |
|
|
— |
|
|
— |
|
|
311 |
|
Contract settlement charge |
— |
|
|
— |
|
|
— |
|
|
2,100 |
|
Southbridge Landfill closure charge (settlement), net |
625 |
|
|
(9,498 |
) |
|
2,097 |
|
|
(7,740 |
) |
Expense from acquisition activities and other items |
1,097 |
|
|
581 |
|
|
2,237 |
|
|
930 |
|
Withdrawal costs - multiemployer pension plan |
3,591 |
|
|
— |
|
|
3,591 |
|
|
— |
|
Depreciation and amortization |
20,940 |
|
|
18,202 |
|
|
58,144 |
|
|
51,572 |
|
Depletion of landfill operating lease obligations |
1,957 |
|
|
2,834 |
|
|
5,580 |
|
|
7,827 |
|
Interest accretion on landfill and environmental remediation
liabilities |
1,731 |
|
|
1,429 |
|
|
5,310 |
|
|
4,291 |
|
Adjusted
EBITDA |
$ |
48,426 |
|
|
$ |
42,432 |
|
|
$ |
115,430 |
|
|
$ |
104,162 |
|
Adjusted EBITDA as a
percentage of revenues |
|
24.4% |
|
|
|
24.6% |
|
|
|
21.0% |
|
|
|
21.4% |
|
Depreciation and amortization |
(20,940 |
) |
|
(18,202 |
) |
|
(58,144 |
) |
|
(51,572 |
) |
Depletion of landfill operating lease obligations |
(1,957 |
) |
|
(2,834 |
) |
|
(5,580 |
) |
|
(7,827 |
) |
Interest accretion on landfill and environmental remediation
liabilities |
(1,731 |
) |
|
(1,429 |
) |
|
(5,310 |
) |
|
(4,291 |
) |
Adjusted Operating
Income |
$ |
23,798 |
|
|
$ |
19,967 |
|
|
$ |
46,396 |
|
|
$ |
40,472 |
|
Adjusted Operating Income
as a percentage of revenues |
|
12.0% |
|
|
|
11.6% |
|
|
|
8.4% |
|
|
|
8.3% |
|
Following is a reconciliation of Adjusted Net Income
from Net income:
|
Three Months Ended September
30, |
|
Nine Months Ended September
30, |
|
2019 |
|
2018 |
|
|
2019 |
|
|
2018 |
|
Net income |
$ |
12,386 |
|
$ |
22,302 |
|
|
$ |
22,587 |
|
|
$ |
20,096 |
|
Loss on debt extinguishment |
— |
|
— |
|
|
— |
|
|
7,352 |
|
Development project charge |
— |
|
— |
|
|
— |
|
|
311 |
|
Contract settlement charge |
— |
|
— |
|
|
— |
|
|
2,100 |
|
Southbridge Landfill closure charge (settlement), net |
625 |
|
(9,498 |
) |
|
2,097 |
|
|
(7,740 |
) |
Expense from acquisition activities and other items |
1,097 |
|
581 |
|
|
2,237 |
|
|
930 |
|
Withdrawal costs - multiemployer pension plan |
3,591 |
|
— |
|
|
3,591 |
|
|
— |
|
Tax effect (i) |
23 |
|
(2 |
) |
|
(67 |
) |
|
(29 |
) |
Adjusted Net
Income |
$ |
17,722 |
|
$ |
13,383 |
|
|
$ |
30,445 |
|
|
$ |
23,020 |
|
Diluted weighted
average common shares outstanding |
48,361 |
|
44,175 |
|
|
47,660 |
|
|
43,938 |
|
Dilutive effect of options and other stock awards |
— |
|
— |
|
|
— |
|
|
— |
|
Adjusted Diluted
Weighted Average Common Shares Outstanding |
48,361 |
|
44,175 |
|
|
47,660 |
|
|
43,938 |
|
Adjusted Diluted
Earnings Per Common Share |
$ |
0.37 |
|
$ |
0.30 |
|
|
$ |
0.64 |
|
|
$ |
0.52 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(i) The aggregate tax effect of the adjustments, including any
impact of deferred tax adjustments.
Following is a reconciliation of Adjusted Diluted
Earnings Per Common Share from Diluted earnings per common
share:
|
Three Months Ended September
30, |
|
Nine Months Ended September
30, |
|
2019 |
|
2018 |
|
|
2019 |
|
2018 |
|
Diluted earnings per common share |
$ |
0.26 |
|
$ |
0.50 |
|
|
$ |
0.47 |
|
$ |
0.46 |
|
Loss on debt extinguishment |
— |
|
— |
|
|
— |
|
0.17 |
|
Development project charge |
— |
|
— |
|
|
— |
|
0.01 |
|
Contract settlement charge |
— |
|
— |
|
|
— |
|
0.05 |
|
Southbridge Landfill closure charge (settlement), net |
0.01 |
|
(0.21 |
) |
|
0.04 |
|
(0.19 |
) |
Expense from acquisition activities and other items |
0.02 |
|
0.01 |
|
|
0.05 |
|
0.02 |
|
Withdrawal costs - multiemployer pension plan |
0.08 |
|
— |
|
|
0.08 |
|
— |
|
Tax effect |
— |
|
— |
|
|
— |
|
— |
|
Adjusted Diluted
Earnings Per Common Share |
$ |
0.37 |
|
$ |
0.30 |
|
|
$ |
0.64 |
|
$ |
0.52 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Following is a reconciliation of Free Cash Flow* and
Normalized Free Cash Flow from Net cash provided by operating
activities:
|
Three Months Ended September
30, |
|
Nine Months Ended September
30, |
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
Net cash provided by operating activities (i) |
$ |
33,244 |
|
|
$ |
41,838 |
|
|
$ |
71,495 |
|
|
$ |
89,917 |
|
Capital expenditures |
(29,339 |
) |
|
(16,349 |
) |
|
(75,998 |
) |
|
(51,841 |
) |
Payments on landfill operating lease contracts (i) |
— |
|
|
(1,539 |
) |
|
— |
|
|
(5,006 |
) |
Proceeds from sale of property and equipment |
179 |
|
|
140 |
|
|
542 |
|
|
609 |
|
Proceeds from property insurance settlement |
332 |
|
|
992 |
|
|
332 |
|
|
992 |
|
Free Cash
Flow |
$ |
4,416 |
|
|
$ |
25,082 |
|
|
$ |
(3,629 |
) |
|
$ |
34,671 |
|
Contract settlement costs (ii) |
— |
|
|
— |
|
|
— |
|
|
2,100 |
|
Landfill closure, site improvement and remediation (iii) |
4,863 |
|
|
(5,402 |
) |
|
11,083 |
|
|
(3,739 |
) |
Expense from acquisition activities and other items (iv) |
957 |
|
|
551 |
|
|
2,166 |
|
|
689 |
|
Non-recurring capital expenditures (v) |
5,882 |
|
|
973 |
|
|
11,912 |
|
|
3,578 |
|
Waste USA landfill phase VI construction (vi) |
2,570 |
|
|
— |
|
|
2,570 |
|
|
— |
|
Normalized Free Cash
Flow |
$ |
18,688 |
|
|
$ |
21,204 |
|
|
$ |
24,102 |
|
|
$ |
37,299 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(i) Effective January 1, 2019, as a part of implementing
ASC Topic 842, Leases, cash payments on landfill operating lease
contracts, which historically were capitalized as property, plant
and equipment and presented in the Condensed Consolidated
Statements of Cash Flows as cash outflows from investing
activities, are classified as cash flows from operating activities
that reduce net cash provided by operating activities.
(ii) Includes a contract settlement cash outlay associated
with exiting a contract. (iii) Includes cash outlays
associated with the Southbridge Landfill closure and the Potsdam,
New York environmental site remediation. (iv) Includes cash
outlays associated with acquisition activities and other items.
(v) Includes capital expenditures related to acquisitions and
other non-recurring items. (vi) Includes capital expenditures
related to Waste USA landfill phase VI development.
Following is the Consolidated Net Leverage Ratio* and
the reconciliations of Consolidated Funded Debt, Net* from
long-term debt and finance leases and Consolidated EBITDA* from Net
cash provided by operating activities:
|
Twelve Months Ended September 30, 2019 |
|
Covenant Requirement at September 30, 2019 |
Consolidated Net Leverage
Ratio (i) |
3.24 |
|
4.50 |
(i) Our credit agreement requires us to maintain a maximum
consolidated net leverage ratio, to be measured at the end of each
fiscal quarter ("Consolidated Net Leverage Ratio"). The
Consolidated Net Leverage Ratio is calculated as consolidated
long-term debt and finance leases, net of unencumbered cash and
cash equivalents in excess of $2,000 ("Consolidated Funded Debt,
Net", calculated at $533,744 as of September 30, 2019, or $536,772
of consolidated long-term debt and finance leases, less $3,028 of
cash and cash equivalents in excess of $2,000 as of September 30,
2019), divided by consolidated EBITDA as defined by our credit
agreement ("Consolidated EBITDA"). Consolidated EBITDA is based on
operating results for the twelve months preceding the measurement
date of September 30, 2019. A reconciliation of Consolidated EBITDA
from Net cash provided by operating activities is as follows:
|
Twelve Months Ended September 30, 2019 |
Net cash provided by operating activities |
$ |
102,412 |
|
Changes in assets and liabilities, net of effects of acquisitions
and divestitures |
33,830 |
|
Gain on sale of property and equipment |
884 |
|
Expense from acquisition activities and other items |
(617 |
) |
Withdrawal costs - multiemployer pension plan |
(3,591 |
) |
Southbridge landfill non-cash closure charge |
(14,883 |
) |
Impairment of investment |
(1,069 |
) |
Operating lease right-of-use assets expense |
(7,272 |
) |
Stock based compensation |
(7,297 |
) |
Interest expense, less amortization of debt issuance costs |
23,498 |
|
Benefit for income taxes, net of deferred income taxes |
(840 |
) |
Adjustments as allowed by the credit agreement |
39,608 |
|
Consolidated
EBITDA |
$ |
164,663 |
|
|
|
|
|
CASELLA WASTE SYSTEMS, INC. AND
SUBSIDIARIESRECONCILIATION OF 2019 OUTLOOK
NON-GAAP MEASURES(Unaudited)(In
thousands)
Following is a reconciliation of the Company's estimated
Adjusted EBITDA from estimated Net income for the fiscal year
ending December 31, 2019:
|
(Estimated) Fiscal Year Ending December 31,
2019 |
Net
income |
$31,000 - $34,000 |
Benefit for income taxes |
(1,500) |
Other income |
(1,000) |
Interest expense, net |
25,000 |
Expense from acquisition activities and other items |
2,200 |
Southbridge Landfill closure charge |
2,200 |
Withdrawal costs - multiemployer pension plan |
3,600 |
Depreciation and amortization |
79,000 |
Depletion of landfill operating lease obligations |
7,500 |
Interest accretion on landfill and environmental remediation
liabilities |
6,000 |
Adjusted
EBITDA |
$154,000 - $157,000 |
|
|
Following is a reconciliation of the Company's estimated
Free Cash Flow and estimated Normalized Free Cash Flow from
estimated Net cash provided by operating activities:
|
(Estimated) Fiscal Year Ending December 31,
2019 |
Net cash provided by
operating activities (i) |
$114,000 - $117,000 |
Capital expenditures |
(98,000) |
Proceeds from sale of property and equipment |
600 |
Proceeds from property insurance settlement |
400 |
Free Cash
Flow |
$17,000 - $20,000 |
Landfill closure, site improvement and remediation expenditures
(ii) |
13,000 |
Expense from acquisition activities and other items (iii) |
2,200 |
Waste USA landfill phase VI construction (iv) |
5,200 |
Non-recurring capital expenditures (v) |
14,600 |
Normalized Free Cash
Flow |
$52,000 - $55,000 |
|
|
(i) Effective January 1, 2019, as a part of implementing ASC
Topic 842, Leases, cash payments on landfill operating lease
contracts, which historically were capitalized as property, plant
and equipment and presented in the Condensed Consolidated
Statements of Cash Flows as cash outflows from investing
activities, are classified as cash flows from operating activities
that reduce net cash provided by operating activities.
(ii) Includes cash outlays associated with the Southbridge
Landfill closure and the Potsdam, New York environmental site
remediation. (iii) Includes cash outlays associated with
acquisition activities and other items. (iv) Includes capital
expenditures related to Waste USA landfill phase VI development.
(v) Includes capital expenditures related to acquisitions and
other non-recurring items.
CASELLA WASTE SYSTEMS, INC. AND
SUBSIDIARIESSUPPLEMENTAL DATA
TABLES(Unaudited)(In
thousands)
Amounts of total revenues attributable to services
provided for the three and nine months ended September 30, 2019 and
2018 are as follows:
|
Three Months Ended September 30, |
|
2019 |
|
% of Total
Revenues |
|
2018 |
|
% of Total
Revenues |
Collection |
$ |
98,966 |
|
49.8 |
% |
|
$ |
79,611 |
|
46.1 |
% |
Disposal |
50,552 |
|
25.5 |
% |
|
48,737 |
|
28.2 |
% |
Power generation |
808 |
|
0.4 |
% |
|
920 |
|
0.5 |
% |
Processing |
2,640 |
|
1.3 |
% |
|
2,079 |
|
1.2 |
% |
Solid waste operations |
152,966 |
|
77.0 |
% |
|
131,347 |
|
76.0 |
% |
Organics |
14,166 |
|
7.2 |
% |
|
13,413 |
|
7.8 |
% |
Customer solutions |
20,689 |
|
10.4 |
% |
|
17,195 |
|
9.9 |
% |
Recycling |
10,726 |
|
5.4 |
% |
|
10,877 |
|
6.3 |
% |
Total
revenues |
$ |
198,547 |
|
100.0 |
% |
|
$ |
172,832 |
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, |
|
2019 |
|
% of Total
Revenues |
|
2018 |
|
% of Total
Revenues |
Collection |
$ |
274,111 |
|
49.9 |
% |
|
$ |
220,650 |
|
45.4 |
% |
Disposal |
134,746 |
|
24.5 |
% |
|
136,217 |
|
28.0 |
% |
Power generation |
2,655 |
|
0.5 |
% |
|
4,014 |
|
0.8 |
% |
Processing |
5,426 |
|
1.0 |
% |
|
5,847 |
|
1.3 |
% |
Solid waste operations |
416,938 |
|
75.9 |
% |
|
366,728 |
|
75.5 |
% |
Organics |
42,668 |
|
7.7 |
% |
|
40,259 |
|
8.3 |
% |
Customer solutions |
58,058 |
|
10.6 |
% |
|
48,315 |
|
9.9 |
% |
Recycling |
32,006 |
|
5.8 |
% |
|
30,634 |
|
6.3 |
% |
Total
revenues |
$ |
549,670 |
|
100.0 |
% |
|
$ |
485,936 |
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Components of revenue growth for the three months ended
September 30, 2019 compared to the three months ended September 30,
2018 are as follows:
|
Amount |
|
% of Related
Business |
|
% of Solid Waste
Operations |
|
% of Total Company |
Solid Waste
Operations: |
|
|
|
|
|
|
|
Collection |
$ |
4,175 |
|
|
5.2 |
% |
|
3.2 |
|
% |
|
2.4 |
|
% |
Disposal |
2,790 |
|
|
5.7 |
% |
|
2.1 |
|
% |
|
1.6 |
|
% |
Solid Waste Price |
6,965 |
|
|
|
|
5.3 |
|
% |
|
4.0 |
|
% |
Collection (i) |
(756 |
) |
|
|
|
(0.6 |
) |
% |
|
(0.4 |
) |
% |
Disposal |
776 |
|
|
|
|
0.6 |
|
% |
|
0.4 |
|
% |
Processing |
(126 |
) |
|
|
|
(0.1 |
) |
% |
|
(0.1 |
) |
% |
Solid Waste Volume |
(106 |
) |
|
|
|
(0.1 |
) |
% |
|
(0.1 |
) |
% |
Fuel surcharge and other fees |
562 |
|
|
|
|
0.5 |
|
% |
|
0.5 |
|
% |
Commodity price and volume |
(528 |
) |
|
|
|
(0.4 |
) |
% |
|
(0.3 |
) |
% |
Acquisitions, net divestitures |
18,343 |
|
|
|
|
14.0 |
|
% |
|
10.6 |
|
% |
Closed operations |
(3,358 |
) |
|
|
|
(2.6 |
) |
% |
|
(1.9 |
) |
% |
Total Solid
Waste |
21,878 |
|
|
|
|
16.7 |
|
% |
|
12.7 |
|
% |
Organics |
753 |
|
|
|
|
|
|
0.4 |
|
% |
Customer Solutions
(i) |
3,235 |
|
|
|
|
|
|
1.9 |
|
% |
Recycling
Operations: |
|
|
|
|
% of Recycling
Operations |
|
|
Commodity price |
(2,698 |
) |
|
|
|
(24.8 |
) |
% |
|
(1.6 |
) |
% |
Processing price |
2,270 |
|
|
|
|
20.9 |
|
% |
|
1.3 |
|
% |
Volume |
277 |
|
|
|
|
2.5 |
|
% |
|
0.2 |
|
% |
Total Recycling |
(151 |
) |
|
|
|
(1.4 |
) |
% |
|
(0.1 |
) |
% |
Total Company |
$ |
25,715 |
|
|
|
|
|
|
14.9 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
(i) Adjusted for $259 of inter-company movements between solid
waste collection volume and Customer Solutions associated with the
acquisition of a business.
Solid waste internalization rates by region for the
three and nine months ended September 30, 2019 and 2018 are as
follows:
|
Three Months Ended September
30, |
|
Nine Months Ended September
30, |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
Eastern region |
51.9 |
% |
|
54.3 |
% |
|
49.8 |
% |
|
51.9 |
% |
Western region |
63.0 |
% |
|
70.8 |
% |
|
61.3 |
% |
|
73.4 |
% |
Solid waste
internalization |
57.4 |
% |
|
61.6 |
% |
|
55.3 |
% |
|
61.5 |
% |
Components of capital expenditures (i) for the three and
nine months ended September 30, 2019 and 2018 are as
follows:
|
Three Months Ended September
30, |
|
Nine Months Ended September
30, |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
Growth Capital Expenditures |
$ |
635 |
|
$ |
919 |
|
$ |
1,523 |
|
$ |
1,879 |
Non-Recurring Capital
Expenditures |
5,882 |
|
973 |
|
11,912 |
|
3,578 |
Waste USA Landfill Phase
VI Capital Expenditures |
2,570 |
|
— |
|
2,570 |
|
— |
Replacement Capital
Expenditures: |
|
|
|
|
|
|
|
Landfill development |
7,225 |
|
8,115 |
|
21,278 |
|
21,340 |
Vehicles, machinery, equipment and containers |
11,045 |
|
5,150 |
|
33,961 |
|
21,837 |
Facilities |
1,257 |
|
952 |
|
3,375 |
|
2,208 |
Other |
725 |
|
240 |
|
1,379 |
|
999 |
Replacement Capital
Expenditures |
20,252 |
|
14,457 |
|
59,993 |
|
46,384 |
Capital
Expenditures |
$ |
29,339 |
|
$ |
16,349 |
|
$ |
75,998 |
|
$ |
51,841 |
|
|
|
|
|
|
|
|
|
|
|
|
(i) The Company's capital expenditures are broadly defined as
pertaining to either growth, replacement or non-recurring
activities. Growth capital expenditures are defined as costs
related to development of new airspace, permit expansions, and 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 organic business growth as well as expenditures
associated with adding infrastructure to increase throughput at
transfer stations and recycling facilities. Replacement 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.
Non-recurring capital expenditures are defined as costs of
equipment added directly as a result of new business growth related
to an acquisition or assumption of significant new customers from a
distressed or defunct market participant.
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