Casella Waste Systems, Inc. (NASDAQ: CWST), a regional solid waste,
recycling and resource management services company, today reported
its financial results for the three and six month periods ended
June 30, 2022.
Highlights for the Three Months and Year-to-Date Period
Ended June 30, 2022:
- Revenues
were $283.7 million for the quarter, up $67.8 million, or up 31.4%,
from the same period in 2021.
- Overall
solid waste pricing for the quarter was up 6.9%, driven by
collection pricing, up 7.7%, and disposal pricing, up 5.7%, from
the same period in 2021.
- Net income
was $17.8 million for the quarter, up $6.0 million, or up 51.0%,
from the same period in 2021.
- Adjusted
EBITDA, a non-GAAP measure, was $68.5 million for the quarter, up
$16.4 million, or up 31.4%, from the same period in
2021.
- Net cash
provided by operating activities was $92.3 million for the
year-to-date period, up $13.2 million, or up 16.8%, from the same
period in 2021.
- Adjusted
Free Cash Flow, a non-GAAP measure, was $46.2 million for the
year-to-date period, up $8.6 million, or up 22.9%, from the same
period in 2021.
- Acquired 11
businesses with approximately $47 million of annualized revenues
year-to-date.
“We had a strong quarter as our mature operating efficiency and
pricing programs helped us to offset the impact of historically
high inflation," said John W. Casella, Chairman and CEO of Casella
Waste Systems, Inc. "As a result of these efforts, we grew
quarterly Adjusted EBITDA by 31.4% year-over-year and increased
year-to-date Adjusted Free Cash Flow by 22.9% year-over-year."
"Our core business is performing very well and driving growth,
while our execution against our acquisition strategy has resulted
in incremental growth," Casella said. "As of the twelve-months
ended June 30, 2022, for the first time in the Company’s history,
we exceeded $1.0 billion in annual revenues. This is a true
milestone for the Company. I am proud of our continued execution
and believe we have the right people and processes in place to
continue delivering strong results over the remainder of the
year."
"As we expected, our fuel cost recovery fees effectively helped
to offset the impact of rising fuel costs in the quarter, while
resulting in limited margin compression." Casella said. "Further,
our nimble efforts to adjust our pricing programs early in the year
resulted in a 7.7% increase in collection pricing and a 6.9%
increase in solid waste pricing in the second quarter. These
actions, combined with a continued focus on driving operating costs
out of the business through our key initiatives, underscore our
ability to offset the impact of inflation, and we expect margin
expansion to build through the rest of the year."
“We continue to grow the business meaningfully through
acquisitions. Year-to-date, we have closed on 11 strategic
acquisitions with annualized revenues of approximately $47 million
and continue to have a robust pipeline of opportunities. We remain
disciplined in our approach and have the potential to close on
additional deals this fiscal year." Casella said.
For the quarter, revenues were $283.7 million, up $67.8 million,
or up 31.4%, from the same period in 2021, with revenue growth
mainly driven by: the roll-over impact from acquisitions along with
newly closed acquisitions; positive collection and disposal
pricing; higher solid waste fuel cost recovery fees; higher solid
waste volumes; higher recycled commodity prices; and higher
pricing, fees and volumes within our Resource Solutions operating
segment.
Net income was $17.8 million for the quarter, or $0.34 per
diluted common share, up $6.0 million, or up 51.0%, as compared to
net income of $11.8 million, or $0.23 per diluted common share, for
the same period in 2021. Adjusted Net Income, a non-GAAP measure,
was $18.6 million for the quarter, or $0.36 Adjusted Diluted
Earnings Per Common Share, a non-GAAP measure, up $5.6 million, or
up 42.9%, as compared to Adjusted Net Income of $13.0 million, or
$0.25 Adjusted Diluted Earnings Per Common Share, for the same
period in 2021.
Operating income was $31.7 million for the quarter, up $9.8
million, or up 44.5%, from the same period in 2021. Adjusted EBITDA
was $68.5 million for the quarter, up $16.4 million, or up 31.4%,
from the same period in 2021.
For the year-to-date period, revenues were $517.7 million, up
$112.3 million, or up 27.7%, from the same period in 2021. Net
income was $22.0 million, or $0.43 per diluted common share, for
the year-to-date period, as compared to net income of $16.1
million, or $0.31 per diluted common share, for the same period in
2021. Adjusted Net Income was $24.4 million, or $0.47 Adjusted
Diluted Earnings Per Common Share, for the year-to-date period, as
compared to Adjusted Net Income of $17.8 million, or $0.35 Adjusted
Diluted Earnings Per Common Share, for the same period in 2021.
Operating income was $41.9 million for the year-to-date period,
up $7.9 million from the same period in 2021. Adjusted EBITDA was
$114.0 million for the year-to-date period, up $23.1 million from
the same period in 2021.
Please refer to "Non-GAAP Performance Measures" included in
"Reconciliation of Certain Non-GAAP Measures" below for additional
information and reconciliations of Adjusted Net Income, Adjusted
Diluted Earnings Per Common Share, Adjusted EBITDA or other
Non-GAAP performance measures to their most directly comparable
GAAP measures.
Net cash provided by operating activities was $92.3 million for
the year-to-date period, as compared to $79.0 million for the same
period in 2021. Adjusted Free Cash Flow was $46.2 million for the
year-to-date period, as compared to $37.6 million for the same
period in 2021.
Please refer to "Non-GAAP Liquidity Measures" included in
"Reconciliation of Certain Non-GAAP Measures" below for additional
information and reconciliation of Adjusted Free Cash Flow to its
most directly comparable GAAP measure.
Fiscal Year 2022 Outlook
“Given our strong operating execution year-to-date and the
expected positive contribution of acquisitions completed this year,
we are updating fiscal year 2022 guidance ranges for the second
time this year,” Casella said. “These guidance ranges assume a
stable economic environment through the remainder of the year,
including the current historically high inflationary environment.
We expect our pricing, fuel cost recovery fees, and operating
efficiency programs to allow us to outpace higher costs and drive
margin expansion year-over-year.”
The Company raised guidance for fiscal year 2022 by estimating
results in the following ranges:
- Revenues between $1.035 billion and
$1.050 billion (raised from a range of $1.005 billion to $1.020
billion);
- Net income between $50 million and $54
million (raised from a range of $48 million to $52 million);
- Adjusted EBITDA between $238 million
and $242 million (raised from a range of $232 million to $236
million);
- Net cash provided by operating
activities between $208 million and $212 million (raised from a
range of $204 million to $208 million); and
- Adjusted Free Cash Flow between $106
million and $110 million (raised from a range of $104 million to
$108 million).
Adjusted EBITDA and Adjusted Free Cash Flow related to fiscal
year 2022 are described in the Reconciliation of Fiscal Year 2022
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
Adjusted Free Cash Flow, respectively, however these
forward-looking estimates for fiscal year 2022 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, July 29, 2022 at 10:00 a.m. Eastern Time.
Individuals interested in participating in the call should
register for the call by clicking here
to obtain a dial in number and unique passcode.
Alternatively upon registration, the website linked above provides
an option for the conference provider to call the registrant's
phone line, enabling participation on the call.
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 and accessible using the same
link.
About Casella Waste Systems, Inc.
Casella Waste Systems, Inc., headquartered in Rutland, Vermont,
provides resource management expertise and services to residential,
commercial, municipal, institutional 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 Jason
Mead, Senior Vice President of Finance and Treasurer at (802)
772-2293; media 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, 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; anticipated impacts from future or
completed acquisitions; and guidance for fiscal year 2022, 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, the following: the Company may be unable to adequately
increase prices or drive operating efficiencies to adequately
offset increased costs and inflationary pressures, including
increased fuel prices; it is challenging to predict the duration
and scope of the novel coronavirus pandemic and its negative effect
on the economy, our operations and financial results; the capping
and closure of the Subtitle D landfill located in Southbridge,
Massachusetts ("Southbridge Landfill") could result in material
unexpected costs; recent changes in solid waste laws of the State
of Maine may result in lower revenues or higher operating 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 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; the Company's insurance coverage and
self-insurance reserves may be inadequate to cover all of its
significant risk exposures; 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; the Company may
not be able to successfully integrate acquired businesses; 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 most
recently filed Form 10-K 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: |
|
|
Jason
MeadSenior Vice President of Finance & Treasurer(802)
772-2293 |
|
|
Media: |
|
|
Joseph FuscoVice President(802)
772-2247http://www.casella.com |
CASELLA WASTE SYSTEMS, INC. AND
SUBSIDIARIESUNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS(In thousands, except for
per share data) |
|
|
Three Months EndedJune 30, |
|
Six Months EndedJune 30, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Revenues |
$ |
283,666 |
|
|
$ |
215,875 |
|
|
$ |
517,693 |
|
|
$ |
405,406 |
|
Operating expenses: |
|
|
|
|
|
|
|
Cost of operations |
|
186,038 |
|
|
|
138,553 |
|
|
|
348,493 |
|
|
|
265,691 |
|
General and administration |
|
33,562 |
|
|
|
29,212 |
|
|
|
63,354 |
|
|
|
56,343 |
|
Depreciation and amortization |
|
31,150 |
|
|
|
24,337 |
|
|
|
60,579 |
|
|
|
47,019 |
|
Expense from acquisition activities |
|
1,019 |
|
|
|
1,632 |
|
|
|
3,062 |
|
|
|
2,046 |
|
Southbridge Landfill closure charge |
|
178 |
|
|
|
195 |
|
|
|
318 |
|
|
|
352 |
|
|
|
251,947 |
|
|
|
193,929 |
|
|
|
475,806 |
|
|
|
371,451 |
|
Operating income |
|
31,719 |
|
|
|
21,946 |
|
|
|
41,887 |
|
|
|
33,955 |
|
Other expense (income): |
|
|
|
|
|
|
|
Interest expense, net |
|
5,656 |
|
|
|
5,230 |
|
|
|
10,821 |
|
|
|
10,634 |
|
Other income |
|
(312 |
) |
|
|
(510 |
) |
|
|
(457 |
) |
|
|
(648 |
) |
Other expense, net |
|
5,344 |
|
|
|
4,720 |
|
|
|
10,364 |
|
|
|
9,986 |
|
Income before income
taxes |
|
26,375 |
|
|
|
17,226 |
|
|
|
31,523 |
|
|
|
23,969 |
|
Provision for income
taxes |
|
8,579 |
|
|
|
5,443 |
|
|
|
9,537 |
|
|
|
7,875 |
|
Net income |
$ |
17,796 |
|
|
$ |
11,783 |
|
|
$ |
21,986 |
|
|
$ |
16,094 |
|
Basic weighted average common
shares outstanding |
|
51,642 |
|
|
|
51,366 |
|
|
|
51,567 |
|
|
|
51,273 |
|
Basic earnings per common
share |
$ |
0.34 |
|
|
$ |
0.23 |
|
|
$ |
0.43 |
|
|
$ |
0.31 |
|
Diluted weighted average
common shares outstanding |
|
51,781 |
|
|
|
51,546 |
|
|
|
51,720 |
|
|
|
51,466 |
|
Diluted earnings per common
share |
$ |
0.34 |
|
|
$ |
0.23 |
|
|
$ |
0.43 |
|
|
$ |
0.31 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASELLA WASTE SYSTEMS, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE
SHEETS(In thousands) |
|
|
June 30,2022 |
|
December 31,2021 |
|
(Unaudited) |
|
|
ASSETS |
|
|
|
CURRENT ASSETS: |
|
|
|
Cash and cash equivalents |
$ |
39,309 |
|
$ |
33,809 |
Accounts receivable, net of allowance for credit losses |
|
108,313 |
|
|
86,979 |
Other current assets |
|
33,534 |
|
|
25,691 |
Total current assets |
|
181,156 |
|
|
146,479 |
Property, plant and equipment,
net of accumulated depreciation and amortization |
|
668,381 |
|
|
644,604 |
Operating lease right-of-use
assets |
|
93,253 |
|
|
93,799 |
Goodwill |
|
262,508 |
|
|
232,860 |
Intangible assets, net of
accumulated amortization |
|
96,762 |
|
|
93,723 |
Other non-current assets |
|
68,659 |
|
|
72,115 |
Total assets |
$ |
1,370,719 |
|
$ |
1,283,580 |
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
CURRENT LIABILITIES: |
|
|
|
Current maturities of debt |
$ |
7,636 |
|
$ |
9,901 |
Current operating lease liabilities |
|
6,425 |
|
|
7,307 |
Accounts payable |
|
73,270 |
|
|
63,086 |
Other accrued liabilities |
|
75,683 |
|
|
71,899 |
Total current liabilities |
|
163,014 |
|
|
152,193 |
Debt, less current
portion |
|
575,556 |
|
|
542,503 |
Operating lease liabilities,
less current portion |
|
59,027 |
|
|
56,375 |
Other long-term
liabilities |
|
115,556 |
|
|
110,052 |
Total stockholders'
equity |
|
457,566 |
|
|
422,457 |
Total liabilities and stockholders' equity |
$ |
1,370,719 |
|
$ |
1,283,580 |
|
|
|
|
|
|
CASELLA WASTE SYSTEMS, INC. AND
SUBSIDIARIESUNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS(In
thousands) |
|
|
Six Months EndedJune 30, |
|
|
2022 |
|
|
|
2021 |
|
Cash
Flows from Operating Activities: |
|
|
|
Net
income |
$ |
21,986 |
|
|
$ |
16,094 |
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
Depreciation and amortization |
|
60,579 |
|
|
|
47,019 |
|
Interest accretion on landfill and environmental remediation
liabilities |
|
4,015 |
|
|
|
3,962 |
|
Amortization of debt issuance costs |
|
924 |
|
|
|
1,144 |
|
Stock-based compensation |
|
3,178 |
|
|
|
6,057 |
|
Operating lease right-of-use assets expense |
|
6,824 |
|
|
|
6,407 |
|
Gain on sale of property and equipment |
|
(269 |
) |
|
|
(92 |
) |
Non-cash expense from acquisition activities |
|
645 |
|
|
|
1,022 |
|
Deferred income taxes |
|
7,156 |
|
|
|
7,041 |
|
Changes in assets and liabilities, net of effects of acquisitions
and divestitures |
|
(12,787 |
) |
|
|
(9,641 |
) |
Net cash provided by operating activities |
|
92,251 |
|
|
|
79,013 |
|
Cash
Flows from Investing Activities: |
|
|
|
Acquisitions, net of cash acquired |
|
(56,250 |
) |
|
|
(5,481 |
) |
Additions to property, plant and equipment |
|
(54,868 |
) |
|
|
(56,069 |
) |
Proceeds from sale of property and equipment |
|
507 |
|
|
|
403 |
|
Net cash used in investing
activities |
|
(110,611 |
) |
|
|
(61,147 |
) |
Cash
Flows from Financing Activities: |
|
|
|
Proceeds from debt borrowings |
|
82,200 |
|
|
|
500 |
|
Principal payments on debt |
|
(55,297 |
) |
|
|
(5,643 |
) |
Payments of debt issuance costs |
|
(1,229 |
) |
|
|
— |
|
Payments of contingent consideration |
|
(1,000 |
) |
|
|
— |
|
Proceeds from the exercise of share based awards |
|
192 |
|
|
|
112 |
|
Net cash provided by (used in) financing
activities |
|
24,866 |
|
|
|
(5,031 |
) |
Net
increase in cash and cash equivalents |
|
6,506 |
|
|
|
12,835 |
|
Cash,
cash equivalents and restricted cash, beginning of period |
|
33,809 |
|
|
|
154,342 |
|
Cash,
cash equivalents and restricted cash, end of period |
$ |
40,315 |
|
|
$ |
167,177 |
|
Supplemental Disclosure of Cash Flow Information: |
|
|
|
Cash interest payments |
$ |
9,648 |
|
|
$ |
9,701 |
|
Cash income tax payments |
$ |
2,092 |
|
|
$ |
411 |
|
Non-current assets obtained through long-term financing
obligations |
$ |
4,190 |
|
|
$ |
5,894 |
|
Right-of-use assets obtained in exchange for operating lease
obligations |
$ |
5,194 |
|
|
$ |
1,251 |
|
|
|
|
|
CASELLA WASTE SYSTEMS, INC. AND
SUBSIDIARIESUNAUDITED RECONCILIATION OF CERTAIN
NON-GAAP MEASURES(In thousands)
Non-GAAP Performance Measures
In addition to disclosing financial results prepared in
accordance with generally accepted accounting principles in the
United States ("GAAP"), the Company also presents non-GAAP
performance measures such as Adjusted EBITDA, Adjusted EBITDA as a
percentage of revenues, Adjusted Operating Income, Adjusted
Operating Income as a percentage of revenues, Adjusted Net Income
and Adjusted Diluted Earnings Per Common Share that provide an
understanding of operational performance because it considers them
important supplemental measures of the Company's performance that
are frequently used by securities analysts, investors and other
interested parties in the evaluation of the Company's results. The
Company also believes that identifying the impact of certain items
as adjustments provides more transparency and comparability across
periods. Management uses these non-GAAP performance measures to
further understand its “core operating performance” and believes
its “core operating performance” is helpful in understanding its
ongoing performance in the ordinary course of operations. The
Company believes that providing such non-GAAP performance measures
to investors, in addition to corresponding income statement
measures, affords investors the benefit of viewing the Company’s
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
tables below set forth such performance measures on an adjusted
basis to exclude such items:
|
Three Months EndedJune 30, |
|
Six Months EndedJune 30, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Net income |
$ |
17,796 |
|
|
$ |
11,783 |
|
|
$ |
21,986 |
|
|
$ |
16,094 |
|
Net income as a percentage of revenues |
|
6.3 |
% |
|
|
5.5 |
% |
|
|
4.2 |
% |
|
|
4.0 |
% |
Provision for income taxes |
|
8,579 |
|
|
|
5,443 |
|
|
|
9,537 |
|
|
|
7,875 |
|
Other income |
|
(312 |
) |
|
|
(510 |
) |
|
|
(457 |
) |
|
|
(648 |
) |
Interest expense, net |
|
5,656 |
|
|
|
5,230 |
|
|
|
10,821 |
|
|
|
10,634 |
|
Expense from acquisition activities (i) |
|
1,019 |
|
|
|
1,632 |
|
|
|
3,062 |
|
|
|
2,046 |
|
Southbridge Landfill closure charge (ii) |
|
178 |
|
|
|
195 |
|
|
|
318 |
|
|
|
352 |
|
Depreciation and amortization |
|
31,150 |
|
|
|
24,337 |
|
|
|
60,579 |
|
|
|
47,019 |
|
Depletion of landfill operating lease obligations |
|
2,334 |
|
|
|
1,977 |
|
|
|
4,147 |
|
|
|
3,581 |
|
Interest accretion on landfill and environmental remediation
liabilities |
|
2,050 |
|
|
|
2,005 |
|
|
|
4,015 |
|
|
|
3,962 |
|
Adjusted EBITDA |
$ |
68,450 |
|
|
$ |
52,092 |
|
|
$ |
114,008 |
|
|
$ |
90,915 |
|
Adjusted EBITDA as a percentage of revenues |
|
24.1 |
% |
|
|
24.1 |
% |
|
|
22.0 |
% |
|
|
22.4 |
% |
Depreciation and amortization |
|
(31,150 |
) |
|
|
(24,337 |
) |
|
|
(60,579 |
) |
|
|
(47,019 |
) |
Depletion of landfill operating lease obligations |
|
(2,334 |
) |
|
|
(1,977 |
) |
|
|
(4,147 |
) |
|
|
(3,581 |
) |
Interest accretion on landfill and environmental remediation
liabilities |
|
(2,050 |
) |
|
|
(2,005 |
) |
|
|
(4,015 |
) |
|
|
(3,962 |
) |
Adjusted Operating Income |
$ |
32,916 |
|
|
$ |
23,773 |
|
|
$ |
45,267 |
|
|
$ |
36,353 |
|
Adjusted Operating Income as a percentage of
revenues |
|
11.6 |
% |
|
|
11.0 |
% |
|
|
8.7 |
% |
|
|
9.0 |
% |
|
Three Months EndedJune 30, |
|
Six Months EndedJune 30, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Net income |
$ |
17,796 |
|
|
$ |
11,783 |
|
|
$ |
21,986 |
|
|
$ |
16,094 |
|
Expense from acquisition activities (i) |
|
1,019 |
|
|
|
1,632 |
|
|
|
3,062 |
|
|
|
2,046 |
|
Southbridge Landfill closure charge (ii) |
|
178 |
|
|
|
195 |
|
|
|
318 |
|
|
|
352 |
|
Tax effect (iii) |
|
(396 |
) |
|
|
(597 |
) |
|
|
(998 |
) |
|
|
(728 |
) |
Adjusted Net Income |
$ |
18,597 |
|
|
$ |
13,013 |
|
|
$ |
24,368 |
|
|
$ |
17,764 |
|
|
|
|
|
|
|
|
|
Diluted weighted average common shares
outstanding |
|
51,781 |
|
|
|
51,546 |
|
|
|
51,720 |
|
|
|
51,466 |
|
|
|
|
|
|
|
|
|
Diluted earnings per common share |
$ |
0.34 |
|
|
$ |
0.23 |
|
|
$ |
0.43 |
|
|
$ |
0.31 |
|
Expense from acquisition activities (i) |
|
0.03 |
|
|
|
0.03 |
|
|
|
0.06 |
|
|
|
0.04 |
|
Southbridge Landfill closure charge (ii) |
|
— |
|
|
|
— |
|
|
|
0.01 |
|
|
|
0.01 |
|
Tax effect (iii) |
|
(0.01 |
) |
|
|
(0.01 |
) |
|
|
(0.03 |
) |
|
|
(0.01 |
) |
Adjusted Diluted Earnings Per Common Share |
$ |
0.36 |
|
|
$ |
0.25 |
|
|
$ |
0.47 |
|
|
$ |
0.35 |
|
(i) Expense from acquisition activities is primarily
legal, consulting or other similar costs incurred during the period
associated with due diligence and the acquisition and integration
of acquired businesses or select development projects as part of
the Company’s strategic growth initiative.
(ii) Southbridge Landfill closure charge are expenses
related to the unplanned early closure of the Southbridge Landfill
along with associated legal activities. The Company initiated the
unplanned, premature closure of the Southbridge Landfill in the
fiscal year ended December 31, 2017 due to the significant capital
investment required to obtain expansion permits and for future
development coupled with an uncertain regulatory environment. The
unplanned closure of the Southbridge Landfill reduced the economic
useful life of the assets from prior estimates by approximately ten
years. The Company expects to incur certain costs through
completion of the closure process.
(iii) Tax effect of the adjustments is an aggregate
of the current and deferred tax impact of each adjustment,
including the impact to the effective tax rate, current provision
and deferred provision. The computation considers all relevant
impacts of the adjustments, including available net operating loss
carryforwards and the impact on the remaining valuation
allowance.
Non-GAAP Liquidity Measures
In addition to disclosing financial results prepared in
accordance with GAAP, the Company also presents non-GAAP liquidity
measures such as Adjusted Free Cash Flow that provide an
understanding of the Company's liquidity because it considers them
important supplemental measures of its liquidity that are
frequently used by securities analysts, investors and other
interested parties in the evaluation of the Company's cash flow
generation from its core operations that are then available to be
deployed for strategic acquisitions, growth investments,
development projects, unusual landfill closures, site improvement
and remediation, and strengthening the Company’s balance sheet
through paying down debt. The Company also believes that
identifying the impact of certain items as adjustments provides
more transparency and comparability across periods. Management uses
non-GAAP liquidity measures to understand the Company’s cash flow
provided by operating activities after certain expenditures along
with its consolidated net leverage and believes that these measures
demonstrate the Company’s ability to execute on its strategic
initiatives. The Company believes that providing such non-GAAP
liquidity measures to investors, in addition to corresponding cash
flow statement measures, affords investors the benefit of viewing
the Company’s liquidity using the same financial metrics that the
management team uses in making many key decisions and understanding
how the core business and cash flow generation has performed. The
table below, on an adjusted basis to exclude certain items, sets
forth such liquidity
measures:
|
Three Months EndedJune 30, |
|
Six Months EndedJune 30, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Net cash provided by
operating activities |
$ |
67,537 |
|
|
$ |
46,866 |
|
|
$ |
92,251 |
|
|
$ |
79,013 |
|
Capital expenditures |
|
(41,958 |
) |
|
|
(29,237 |
) |
|
|
(54,868 |
) |
|
|
(56,069 |
) |
Proceeds from sale of property and equipment |
|
362 |
|
|
|
280 |
|
|
|
507 |
|
|
|
403 |
|
Southbridge Landfill closure and Potsdam environmental remediation
(i) |
|
1,052 |
|
|
|
2,143 |
|
|
|
1,954 |
|
|
|
2,534 |
|
Cash outlays from acquisition activities (ii) |
|
1,310 |
|
|
|
756 |
|
|
|
2,416 |
|
|
|
1,024 |
|
Post acquisition and development project capital expenditures
(iii) |
|
1,620 |
|
|
|
1,231 |
|
|
|
3,988 |
|
|
|
4,278 |
|
Waste USA Landfill phase VI capital expenditures (iv) |
|
— |
|
|
|
5,339 |
|
|
|
— |
|
|
|
6,439 |
|
Adjusted Free Cash
Flow |
$ |
29,923 |
|
|
$ |
27,378 |
|
|
$ |
46,248 |
|
|
$ |
37,622 |
|
(i) Southbridge Landfill closure and Potsdam
environmental remediation are cash outlays associated with the
unplanned closure of the Southbridge Landfill and the Company's
portion of costs associated with environmental remediation at
Potsdam, which are added back when calculating Adjusted Free Cash
Flow due to their non-recurring nature and the significance of the
related cash flows. The Company initiated the unplanned closure of
the Southbridge Landfill in the fiscal year ended December 31, 2017
and expects to incur cash outlays through completion of the closure
and environmental remediation process. The Potsdam site was deemed
a Superfund site in 2000 and is not associated with current
operations.
(ii) Cash outlays from acquisition activities are
cash outlays for transaction and integration costs relating to
specific acquisition transactions and include legal, environmental,
valuation and consulting as well as asset, workforce and system
integration costs as part of the Company’s strategic growth
initiative.
(iii) Post acquisition and development project
capital expenditures are (x) acquisition related capital
expenditures that are necessary to optimize strategic synergies
associated with integrating newly acquired operations as
contemplated by the discounted cash flow return analysis conducted
by management as part of the acquisition investment decision; and
(y) non-routine development investments that are expected to
provide long-term returns. Acquisition related capital expenditures
include costs required to achieve initial operating synergies and
integrate operations.
(iv) Waste USA Landfill phase VI capital expenditures
related to the Company's landfill in Coventry, Vermont ("Waste USA
Landfill") phase VI construction and development that are added
back when calculating Adjusted Free Cash Flow due to the specific
nature of this investment in the development of long-term
infrastructure which is different from landfill construction
investments in the normal course of operations. This investment at
the Waste USA Landfill is unique because the Company is investing
in long-term infrastructure over an estimated four year period that
will not yield a positive economic benefit until 2023 and extending
over approximately 20 years.
Non-GAAP financial measures are not in accordance with or an
alternative for GAAP. Adjusted EBITDA, Adjusted EBITDA as a
percentage of revenues, Adjusted Operating Income, Adjusted
Operating Income as a percentage of revenues, Adjusted Net Income,
Adjusted Diluted Earnings Per Common Share, and Adjusted 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, Adjusted EBITDA as a
percentage of revenues, Adjusted Operating Income, Adjusted
Operating Income as a percentage of revenues, Adjusted Net Income,
Adjusted Diluted Earnings Per Common Share, and Adjusted Free Cash
Flow presented by other companies.
CASELLA WASTE SYSTEMS, INC. AND
SUBSIDIARIESUNAUDITED RECONCILIATION OF FISCAL
YEAR 2022 OUTLOOK NON-GAAP MEASURES(In
thousands)
Following is a reconciliation of the Company's estimated
Adjusted EBITDA (i) from estimated Net income for fiscal year
2022:
|
(Estimated) Fiscal Year Ending December 31,
2022 |
Net income |
$50,000 - $54,000 |
Provision for income taxes |
22,000 |
Other income |
(1,000) |
Interest expense, net |
22,000 |
Expense from acquisition activities |
3,000 |
Southbridge Landfill closure charge |
1,000 |
Depreciation and amortization |
126,000 |
Depletion of landfill operating lease obligations |
8,000 |
Interest accretion on landfill and environmental remediation
liabilities |
7,000 |
Adjusted EBITDA |
$238,000 - $242,000 |
Following is a reconciliation of the Company's estimated
Adjusted Free Cash Flow (i) from estimated Net cash provided by
operating activities for fiscal year 2022:
|
(Estimated) Fiscal YearEnding December 31,
2022 |
Net cash provided by operating activities |
$208,000 - $212,000 |
Capital expenditures |
(130,000) |
Proceeds from sale of property and equipment |
500 |
Southbridge Landfill closure and Potsdam environmental
remediation |
5,000 |
Cash outlays from acquisition activities |
2,500 |
Post acquisition and development project capital expenditures |
20,000 |
Adjusted Free Cash Flow |
$106,000 - $110,000 |
(i) See footnotes for Non-GAAP Performance Measures and
Non-GAAP Liquidity Measures included in the Reconciliation of
Certain Non-GAAP Measures for further disclosure over the nature of
the various adjustments to estimated Adjusted EBITDA and estimated
Adjusted Free Cash Flow.
CASELLA WASTE SYSTEMS, INC. AND
SUBSIDIARIESUNAUDITED SUPPLEMENTAL DATA
TABLES(In thousands)
Amounts of total revenues attributable to services
provided for the three and six months ended June 30, 2022 and 2021
are as follows:
|
Three Months Ended June 30, |
|
2022 |
|
% of TotalRevenues |
|
2021 |
|
% of TotalRevenues |
Collection |
$ |
137,261 |
|
48.4 |
% |
|
$ |
107,327 |
|
49.7 |
% |
Disposal |
|
60,204 |
|
21.2 |
% |
|
|
49,173 |
|
22.8 |
% |
Power
generation |
|
1,753 |
|
0.6 |
% |
|
|
1,100 |
|
0.5 |
% |
Processing |
|
2,929 |
|
1.1 |
% |
|
|
2,310 |
|
1.1 |
% |
Solid waste operations |
|
202,147 |
|
71.3 |
% |
|
|
159,910 |
|
74.1 |
% |
Processing |
|
33,867 |
|
11.9 |
% |
|
|
21,031 |
|
9.7 |
% |
Non-processing |
|
47,652 |
|
16.8 |
% |
|
|
34,934 |
|
16.2 |
% |
Resource Solutions operations |
|
81,519 |
|
28.7 |
% |
|
|
55,965 |
|
25.9 |
% |
Total revenues |
$ |
283,666 |
|
100.0 |
% |
|
$ |
215,875 |
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
|
2022 |
|
% of TotalRevenues |
|
2021 |
|
% of TotalRevenues |
Collection |
$ |
256,793 |
|
49.6 |
% |
|
$ |
204,796 |
|
50.5 |
% |
Disposal |
|
103,356 |
|
20.0 |
% |
|
|
87,026 |
|
21.5 |
% |
Power generation |
|
4,407 |
|
0.9 |
% |
|
|
2,403 |
|
0.6 |
% |
Processing |
|
4,749 |
|
0.8 |
% |
|
|
3,794 |
|
0.9 |
% |
Solid waste operations |
|
369,305 |
|
71.3 |
% |
|
|
298,019 |
|
73.5 |
% |
Processing |
|
61,263 |
|
11.9 |
% |
|
|
38,302 |
|
9.5 |
% |
Non-processing |
|
87,125 |
|
16.8 |
% |
|
|
69,085 |
|
17.0 |
% |
Resource Solutions operations |
|
148,388 |
|
28.7 |
% |
|
|
107,387 |
|
26.5 |
% |
Total
revenues |
$ |
517,693 |
|
100.0 |
% |
|
$ |
405,406 |
|
100.0 |
% |
Components of revenue growth for the three months ended
June 30, 2022 compared to the three months ended June 30, 2021 are
as follows:
|
Amount |
|
%
ofRelatedBusiness |
|
% ofOperations |
|
% of TotalCompany |
Solid waste operations: |
|
|
|
|
|
|
|
Collection |
$ |
8,289 |
|
|
7.7 |
% |
|
5.2 |
% |
|
3.8 |
% |
Disposal |
|
2,793 |
|
|
5.7 |
% |
|
1.7 |
% |
|
1.3 |
% |
Solid waste price |
|
11,082 |
|
|
|
|
6.9 |
% |
|
5.1 |
% |
Collection |
|
(679 |
) |
|
|
|
(0.4 |
)% |
|
(0.3 |
)% |
Disposal |
|
3,049 |
|
|
|
|
1.9 |
% |
|
1.4 |
% |
Processing |
|
235 |
|
|
|
|
0.1 |
% |
|
0.1 |
% |
Solid waste volume |
|
2,605 |
|
|
|
|
1.6 |
% |
|
1.2 |
% |
Surcharges and other fees |
|
8,433 |
|
|
|
|
5.3 |
% |
|
4.0 |
% |
Commodity price and volume |
|
741 |
|
|
|
|
0.5 |
% |
|
0.3 |
% |
Acquisitions |
|
19,378 |
|
|
|
|
12.1 |
% |
|
9.0 |
% |
Closed operations |
|
(2 |
) |
|
|
|
— |
% |
|
— |
% |
Total solid waste operations |
|
42,237 |
|
|
|
|
26.4 |
% |
|
19.6 |
% |
Resource Solutions
operations: |
|
|
|
|
|
|
|
Price |
|
4,830 |
|
|
|
|
8.6 |
% |
|
2.2 |
% |
Volume |
|
2,833 |
|
|
|
|
5.1 |
% |
|
1.3 |
% |
Surcharges and other fees |
|
667 |
|
|
|
|
1.2 |
% |
|
0.3 |
% |
Acquisitions |
|
17,224 |
|
|
|
|
30.8 |
% |
|
8.0 |
% |
Total Resource Solutions operations |
|
25,554 |
|
|
|
|
45.7 |
% |
|
11.8 |
% |
Total company |
$ |
67,791 |
|
|
|
|
|
|
31.4 |
% |
Solid waste internalization rates by region for the
three and six months ended June 30, 2022 and 2021 are as
follows:
|
Three Months EndedJune 30, |
|
Six Months EndedJune 30, |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
Eastern region |
38.9 |
% |
|
52.6 |
% |
|
39.3 |
% |
|
51.4 |
% |
Western region |
59.6 |
% |
|
59.9 |
% |
|
57.9 |
% |
|
60.6 |
% |
Solid waste internalization |
49.4 |
% |
|
56.4 |
% |
|
48.6 |
% |
|
56.2 |
% |
Components of capital expenditures (i) for the three and
six months ended June 30, 2022 and 2021 are as
follows:
|
Three Months EndedJune 30, |
|
Six Months EndedJune 30, |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
Growth capital expenditures: |
|
|
|
|
|
|
|
Post acquisition and development project |
$ |
1,620 |
|
$ |
1,231 |
|
$ |
3,988 |
|
$ |
4,278 |
Waste USA Landfill phase VI |
|
— |
|
|
5,339 |
|
|
— |
|
|
6,439 |
Other |
|
1,719 |
|
|
4,655 |
|
|
2,486 |
|
|
6,394 |
Growth capital expenditures |
|
3,339 |
|
|
11,225 |
|
|
6,474 |
|
|
17,111 |
Replacement capital expenditures: |
|
|
|
|
|
|
|
Landfill development |
|
11,302 |
|
|
7,476 |
|
|
12,862 |
|
|
8,765 |
Vehicles, machinery, equipment and containers |
|
22,852 |
|
|
8,175 |
|
|
29,524 |
|
|
25,743 |
Facilities |
|
3,080 |
|
|
1,019 |
|
|
4,225 |
|
|
1,669 |
Other |
|
1,385 |
|
|
1,342 |
|
|
1,783 |
|
|
2,781 |
Replacement capital expenditures |
|
38,619 |
|
|
18,012 |
|
|
48,394 |
|
|
38,958 |
Capital expenditures |
$ |
41,958 |
|
$ |
29,237 |
|
$ |
54,868 |
|
$ |
56,069 |
(i) The Company's capital expenditures are
broadly defined as pertaining to either growth or replacement
activities. Growth capital expenditures are defined as costs
related to development projects, organic business growth, and the
integration of newly acquired operations. Growth capital
expenditures include costs related to the following: 1) post
acquisition and development projects that are necessary to optimize
strategic synergies associated with integrating newly acquired
operations as contemplated by the discounted cash flow return
analysis conducted by management as part of the acquisition
investment decision as well as non-routine development investments
that are expected to provide long-term returns and includes the
capital expenditures required to achieve initial operating
synergies and integrate operations; 2) Waste USA Landfill phase VI
construction and development for long-term infrastructure, which is
unique and different from landfill construction investments in the
normal course of operations because the Company is investing in
long-term infrastructure over an estimated four year period that
will not yield a positive economic benefit until 2023 and extending
over approximately 20 years; and 3) development of new airspace,
permit expansions, and new recycling contracts, equipment added
directly as a result of organic business growth and infrastructure
added 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.
Casella Waste Systems (NASDAQ:CWST)
Historical Stock Chart
From Jun 2024 to Jul 2024
Casella Waste Systems (NASDAQ:CWST)
Historical Stock Chart
From Jul 2023 to Jul 2024