Casella Waste Systems, Inc. Announces Second Quarter Fiscal Year 2012 Results
Highlights for the quarter included:
- Revenue growth of 5.7 percent over the same quarter last year.
- Overall solid waste pricing growth of 1.6 percent was primarily driven by strong collection pricing growth of 3.4 percent as a percentage of collection revenues.
- Adjusted EBITDA* was
$30.5 million for the quarter, down$0.3 million from same quarter last year. - Free cash flow* was
$6.0 million for the quarter and$3.4 million year-to-date. - Company reaffirms Revenue, Adjusted EBITDA and Free Cash Flow guidance ranges for fiscal year 2012.
For the quarter ended
The company's net loss attributable to common shareholders was
"We continued to make great progress during the second quarter improving the fundamentals of our core business," said
"We are also driving increased collection volumes through our ability to differentiate our service offerings with resource solutions, such as Zero-Sort® Recycling, and our heightened focus on customer care," Casella said. "In spite of the stagnant economic environment, MSW and C&D landfill volumes were up for the quarter, while historically lumpy special waste volumes were down this quarter at most of our sites."
"In late August and early September, the Northeast was hit with two major storms, Irene and Lee, that destroyed local roads and bridges and devastated hundreds of homes and businesses," Casella said. "Our people were prepared for the storms, and with their foresight we avoided major damage to our facilities and equipment. In fact, we were able to get our customer care center operational and our trucks running the day after the storms to meet the needs of our customers and our communities. As a result of the storm clean-up, we realized higher roll-off pulls and landfill volumes at several sites; however much of this benefit was offset by increased operating costs due to the storms."
Fiscal 2012 Outlook
The company reaffirmed its fiscal year guidance in the following categories:
- Revenues between
$475.0 million and $487.0 million . - Adjusted EBITDA* between
$105.0 million and $110.0 million . - Free
Cash Flow * between$2.0 million and $7.0 million .
*Non-GAAP Financial Measures
In addition to disclosing financial results prepared in accordance with Generally Accepted Accounting Principles in
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" represents its on-going 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 may look in the future. The company further believes that providing this information allows its investors greater transparency and a better understanding of its core financial performance. In addition, the instruments governing the company's indebtedness use EBITDA (with additional adjustments) to measure its compliance with covenants such as interest coverage, leverage and debt incurrence.
Non-GAAP financial measures are not in accordance with, or an alternative for, GAAP Adjusted EBITDA and 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.
About
Conference call to discuss quarter
The Company will host a conference call to discuss these results on
Safe Harbor Statement
Certain matters discussed in this press release are "forward-looking statements" intended to qualify for the safe harbors from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements can generally be identified as such by the context of the statements, including words such as "believe," "expect," "anticipate," "plan," "may," "will," "would," "intend," "estimate," "guidance" and other similar expressions, whether in the negative or affirmative. These forward-looking statements are based on current expectations, estimates, forecasts and projections about the industry and markets in which we operate and management's beliefs and assumptions. We cannot guarantee that we actually will achieve the plans, intentions, expectations or guidance disclosed in the forward-looking statements made. Such forward-looking statements, and all phases of
our operations, involve a number of risks and uncertainties, any one or more of which could cause actual results to differ materially from those described in our forward-looking statements. Such risks and uncertainties include or relate to, among other things: current economic conditions that have adversely affected and may continue to adversely affect our revenues and our operating margin; we may be unable to reduce costs or increase 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 the commodity pricing of our recyclables may make it more difficult for us to predict our results of operations or meet our estimates; and we may incur environmental charges or asset impairments
in the future. There are a number of other important risks and uncertainties that could cause our actual results to differ materially from those indicated by such forward-looking statements. These additional risks and uncertainties include, without limitation, those detailed in Item 1A, "Risk Factors" in our Form 10-K for the year ended
We undertake no obligation to update publicly any forward-looking statements whether as a result of new information, future events or otherwise, except as required by law.
CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except amounts per share)
Three Months Ended Six Months Ended
------------------------ ------------------------
October 31, October 31, October 31, October 31,
2011 2010 2011 2010
----------- ----------- ----------- -----------
Revenues $ 129,866 $ 122,895 $ 257,059 $ 244,887
Operating expenses:
Cost of operations 86,627 79,313 171,851 160,652
General and
administration 16,062 15,696 32,268 31,613
Depreciation and
amortization 15,061 15,620 29,567 31,203
Legal settlement 359 - 1,359 -
Development project
charge 131 - 131 -
Gain on sale of assets - - - (3,502)
----------- ----------- ----------- -----------
118,240 110,629 235,176 219,966
----------- ----------- ----------- -----------
Operating income 11,626 12,266 21,883 24,921
Other expense/(income),
net:
Interest expense, net 11,207 11,619 22,357 23,384
Loss from equity
method investments 1,523 506 3,781 2,638
Other income (327) (317) (432) (412)
----------- ----------- ----------- -----------
12,403 11,808 25,706 25,610
----------- ----------- ----------- -----------
(Loss) income from
continuing operations
before income taxes and
discontinued operations (777) 458 (3,823) (689)
Provision for income
taxes 67 281 728 1,060
----------- ----------- ----------- -----------
(Loss) income from
continuing operations
before discontinued
operations (844) 177 (4,551) (1,749)
Discontinued operations:
Loss from discontinued
operations, net of
income taxes (1) - (767) - (1,692)
Gain (loss) on
disposal of
discontinued
operations, net of
income taxes (1) 79 (564) 725 (615)
----------- ----------- ----------- -----------
Net loss attributable to
common stockholders $ (765) $ (1,154) $ (3,826) $ (4,056)
=========== =========== =========== ===========
Common stock and common
stock equivalent shares
outstanding, assuming
full dilution 26,759 26,788 26,661 25,981
=========== =========== =========== ===========
Net loss per common
share attributable to
common stockholders $ (0.03) $ (0.04) $ (0.14) $ (0.16)
=========== =========== =========== ===========
Adjusted EBITDA (2) $ 30,532 $ 30,804 $ 59,194 $ 58,577
=========== =========== =========== ===========
CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
October 31, April 30,
ASSETS 2011 2011
--------------- ---------------
CURRENT ASSETS:
Cash and cash equivalents $ 4,421 $ 1,817
Restricted cash 76 76
Accounts receivable - trade, net of
allowance for doubtful accounts 56,984 54,914
Other current assets 14,989 15,598
--------------- ---------------
Total current assets 76,470 72,405
Property, plant and equipment, net of
accumulated depreciation 461,359 453,361
Goodwill 101,329 101,204
Intangible assets, net 2,468 2,455
Restricted assets 403 334
Notes receivable - related party/employee 720 1,297
Investments in unconsolidated entities 34,906 38,263
Other non-current assets 20,285 21,262
--------------- ---------------
Total assets $ 697,940 $ 690,581
=============== ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt and
capital leases $ 1,297 $ 1,217
Current maturities of financing lease
obligations 327 316
Accounts payable 51,758 42,499
Other accrued liabilities 41,047 39,889
--------------- ---------------
Total current liabilities 94,429 83,921
Long-term debt and capital leases, less
current maturities 461,915 461,418
Financing lease obligations, less current
maturities 1,989 2,156
Other long-term liabilities 47,012 49,099
Total Casella Waste Systems, Inc. and
Subsidiaries stockholders' equity 91,325 93,987
Noncontrolling interest 1,270 -
--------------- ---------------
Total stockholders' equity 92,595 93,987
Total liabilities and stockholders' equity $ 697,940 $ 690,581
=============== ===============
CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Six Months Ended
--------------------------------
October 31, October 31,
2011 2010
--------------- ---------------
Cash Flows from Operating Activities:
Net loss attributable to common
stockholders $ (3,826) $ (4,056)
Loss from discontinued operations, net of
income taxes - 1,692
(Gain) loss on disposal of discontinued
operations, net of income taxes (725) 615
Adjustments to reconcile net loss to net
cash
provided by operating activities -
Gain on sale of assets - (3,502)
Gain on sale of property and equipment (754) (302)
Depreciation and amortization 29,567 31,203
Depletion of landfill operating lease
obligations 4,514 4,299
Interest accretion on landfill and
environmental remediation liabilities 1,740 1,656
Development project charge 131 -
Amortization of premium on senior
subordinated notes - (386)
Amortization of discount on term loan
and second lien notes 467 450
Loss from equity method investments 3,781 2,638
Stock-based compensation 1,366 1,347
Excess tax benefit on the vesting of
share based awards (219) (117)
Deferred income taxes 1,008 1,185
Changes in assets and liabilities, net
of effects of acquisitions and
divestitures 4,428 (2,566)
--------------- ---------------
46,029 35,905
--------------- ---------------
Net Cash Provided by Operating
Activities 41,478 34,156
--------------- ---------------
Cash Flows from Investing Activities:
Acquisitions, net of cash acquired (715) -
Additions to property, plant and
equipment - growth (6,410) (990)
- maintenance (29,560) (29,779)
Payments on landfill operating lease
contracts (3,314) (2,250)
Proceeds from sale of assets - 7,533
Proceeds from sale of property and
equipment 1,170 555
Investments in unconsolidated entities (935) -
--------------- ---------------
Net Cash Used In Investing Activities (39,764) (24,931)
--------------- ---------------
Cash Flows from Financing Activities:
Proceeds from long-term borrowings 82,100 76,900
Principal payments on long-term debt (82,146) (83,966)
Payments of financing costs (184) (357)
Proceeds from exercise of share based
awards 176 160
Excess tax benefit on the vesting of
share based awards 219 117
--------------- ---------------
Net Cash Provided By (Used In)
Financing Activities 165 (7,146)
--------------- ---------------
Cash Provided By (Used In) Discontinued
Operations 725 (70)
--------------- ---------------
Net increase in cash and cash equivalents 2,604 2,009
Cash and cash equivalents, beginning of
period 1,817 2,035
--------------- ---------------
Cash and cash equivalents, end of period $ 4,421 $ 4,044
=============== ===============
Supplemental Disclosures:
Cash interest $ 20,531 $ 21,344
Cash income taxes, net of refunds $ 5,281 $ 117
CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands)
Note 1: Discontinued Operations
On
We completed the transaction on
In the three months ended
During the third quarter of fiscal year 2011, we also completed the sale of the assets of the Trilogy Glass business for cash proceeds of
The operating results of these operations, which relate only to prior fiscal year periods, have been reclassified from continuing to discontinued operations in the accompanying unaudited condensed consolidated financial statements. Revenues and loss before income tax provision attributable to discontinued operations for the three and six months ended
We allocate interest expense to discontinued operations. We have also eliminated certain immaterial inter-company activity associated with discontinued operations.
Note 2: Non - GAAP Financial Measures
In addition to disclosing financial results prepared in accordance with Generally Accepted Accounting Principles (GAAP), we also disclose earnings before interest, taxes, depreciation and amortization, adjusted for accretion, depletion of landfill operating lease obligations, gain on sale of assets, development project charge write-off, as well as legal settlement charges (Adjusted EBITDA) which is a non-GAAP measure. We also disclose Free Cash Flow, which is defined as net cash provided by operating activities, less capital expenditures, less payments on landfill operating leases, less assets acquired through financing leases, plus proceeds from the sale of assets and property and equipment, which is a non-GAAP measure. Adjusted EBITDA is reconciled to net income (loss), while Free Cash Flow is reconciled to Net Cash Provided by Operating Activities.
We present Adjusted EBITDA and Free Cash Flow because we consider them important supplemental measures of our performance and believe they are frequently used by securities analysts, investors and other interested parties in the evaluation of our results. Management uses these non-GAAP measures to further understand our "core operating performance." We believe our "core operating performance" represents our on-going performance in the ordinary course of operations. We believe that providing Adjusted EBITDA and Free Cash Flow to investors, in addition to corresponding income statement and cash flow statement measures, provides investors the benefit of viewing our performance using the same financial metrics that the management team uses in making many key decisions and understanding how the core business and its results of operations may look in the future. We further believe that providing this information allows our investors greater transparency and a better understanding of our core financial performance. In addition, the instruments governing our indebtedness use EBITDA (with additional adjustments) to measure our compliance with covenants such as interest coverage, leverage and debt incurrence.
Non-GAAP financial measures are not in accordance with, or an alternative for, GAAP in the U.S. Adjusted EBITDA and Free Cash Flow should not be considered in isolation from or as a substitute for financial information presented in accordance with GAAP in the U.S., and may be different from Adjusted EBITDA or Free Cash Flow presented by other companies.
Following is a reconciliation of Adjusted EBITDA to Net Loss Attributable
to Common Stockholders:
Three Months Ended Six Months Ended
------------------------ ------------------------
October 31, October 31, October 31, October 31,
2011 2010 2011 2010
----------- ----------- ----------- -----------
Net Loss Attributable to
Common Stockholders $ (765) $ (1,154) $ (3,826) $ (4,056)
Loss from discontinued
operations, net of
income taxes - 767 - 1,692
(Gain) loss on disposal
of discontinued
operations, net of
income taxes (79) 564 (725) 615
Provision for income
taxes 67 281 728 1,060
Interest expense, net 11,207 11,619 22,357 23,384
Depreciation and
amortization 15,061 15,620 29,567 31,203
Other expense, net 1,196 189 3,349 2,226
Legal settlement 359 - 1,359 -
Development project
charge 131 - 131 -
Gain on sale of assets - - - (3,502)
Depletion of landfill
operating lease
obligations 2,484 2,107 4,514 4,299
Interest accretion on
landfill and
environmental
remediation
liabilities 871 811 1,740 1,656
----------- ----------- ----------- -----------
Adjusted EBITDA (2) $ 30,532 $ 30,804 $ 59,194 $ 58,577
=========== =========== =========== ===========
Following is a reconciliation of Free Cash Flow to Net Cash Provided by
Operating Activities:
Three Months Ended Six Months Ended
------------------------ ------------------------
October 31, October 31, October 31, October 31,
2011 2010 2011 2010
----------- ----------- ----------- -----------
Net Cash Provided by
Operating Activities $ 27,538 $ 22,793 $ 41,478 $ 34,156
Capital expenditures (21,102) (15,902) (35,970) (30,769)
Payments on landfill
operating lease
contracts (1,456) (1,461) (3,314) (2,250)
Proceeds from sale of
assets and property and
equipment 971 247 1,170 8,088
----------- ----------- ----------- -----------
Free Cash Flow (2) $ 5,951 $ 5,677 $ 3,364 $ 9,225
=========== =========== =========== ===========
CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES
SUPPLEMENTAL DATA TABLES
(Unaudited)
(In thousands)
Amounts of our total revenues attributable to services provided for the
three and six months ended October 31, 2011 and 2010 are as follows:
Three Months Ended October 31,
-----------------------------------------------
% of Total % of Total
2011 Revenue 2010 Revenue
----------- ---------- ----------- ----------
Collection $ 54,764 42.2% $ 52,058 42.4%
Disposal 31,104 24.0% 31,075 25.3%
Power generation 6,340 4.9% 6,273 5.1%
Processing and organics 13,992 10.8% 12,972 10.6%
----------- ---------- ----------- ----------
Solid waste operations 106,200 81.9% 102,378 83.4%
Major accounts 9,847 7.5% 10,140 8.2%
Recycling 13,819 10.6% 10,377 8.4%
----------- ---------- ----------- ----------
Total revenues $ 129,866 100.0% $ 122,895 100.0%
=========== ========== =========== ==========
Six Months Ended October 31,
-----------------------------------------------
% of Total % of Total
2011 Revenue 2010 Revenue
----------- ---------- ----------- ----------
Collection $ 108,390 42.2% $ 104,560 42.7%
Disposal 60,422 23.5% 60,630 24.8%
Power generation 12,237 4.8% 11,986 4.9%
Processing and organics 28,730 11.2% 26,220 10.7%
----------- ---------- ----------- ----------
Solid waste operations 209,779 81.7% 203,396 83.1%
Major accounts 20,557 7.9% 20,540 8.3%
Recycling 26,723 10.4% 20,951 8.6%
----------- ---------- ----------- ----------
Total revenues $ 257,059 100.0% $ 244,887 100.0%
=========== ========== =========== ==========
Components of revenue growth for the three months endedOctober 31, 2011 compared to the three months endedOctober 31, 2010 are as follows: % of % of Solid Related Waste % of Total Amount Business Operations Company ----------- ---------- ---------- ---------- Solid Waste Operations: Collection $ 1,783 3.4% 1.7% 1.5% Disposal (240) -0.8% -0.2% -0.2% Power operations 102 1.6% 0.1% 0.1% Processing and organics - 0.0% 0.0% 0.0% ----------- ---------- ---------- Solid Waste Yield 1,645 1.6% 1.4% Volume (211) -0.2% -0.2% Commodity price & volume 1,063 1.0% 0.9% Acquisitions & divestitures 1,329 1.3% 1.1% Closed landfill (4) 0.0% 0.0% ----------- ---------- ---------- Total Solid Waste 3,822 3.7% 3.2% ----------- ========== ========== Major Accounts (293) -0.2% ----------- ---------- Recycling Operations: % of Recycling Operations ---------- Commodity price 3,749 36.1% 3.1% Commodity volume (307) -2.9% -0.2% ----------- ---------- ---------- Total Recycling 3,442 33.2% 2.9% ----------- ========== ========== Total Company $ 6,971 5.7% =========== ==========
Solid Waste Internalization Rates by Region:
Three Months Ended Six Months Ended
October 31, October 31,
-------------------- --------------------
2011 2010 2011 2010
--------- --------- --------- ---------
Eastern region 59.7% 54.9% 56.9% 52.8%
Western region 77.0% 75.1% 76.6% 75.7%
Solid waste internalization 68.9% 66.1% 67.3% 65.1%
CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES
SUPPLEMENTAL DATA TABLES
(Unaudited)
(In thousands)
GreenFiber Financial Statistics - as reported (1):
Three Months Ended Six Months Ended
October 31, October 31,
---------------------- ----------------------
2011 2010 2011 2010
---------- ---------- ---------- ----------
Revenues $ 21,841 $ 20,581 $ 37,856 $ 38,018
Net loss (3,049) (1,012) (7,564) (5,276)
Cash flow used in operations (949) (3,414) (2,258) (3,038)
Net working capital changes (149) (4,856) 726 (2,692)
Adjusted EBITDA $ (800) $ 1,442 $ (2,984) $ (346)
As a percentage of revenues:
Net loss -14.0% -4.9% -20.0% -13.9%
Adjusted EBITDA -3.7% 7.0% -7.9% -0.9%
(1) We hold a 50% interest in US Green Fiber, LLC ("GreenFiber"), a joint
venture that manufactures, markets and sells cellulose insulation made from
recycled fiber.
Components of Growth and Maintenance Capital Expenditures (1):
Three Months Ended Six Months Ended
October 31, October 31,
--------------------- ---------------------
2011 2010 2011 2010
---------- ---------- ---------- ----------
Growth capital expenditures:
Landfill development $ 203 $ - $ 244 $ 227
Landfill gas to energy project 792 - 1,159 -
MRF equipment upgrades 2,498 - 3,007 -
Other 1,774 108 2,000 763
---------- ---------- ---------- ----------
Total Growth Capital
Expenditures 5,267 108 6,410 990
---------- ---------- ---------- ----------
Maintenance capital
expenditures:
Vehicles, machinery / equipment
and containers $ 3,901 $ 3,930 $ 10,341 $ 10,332
Landfill construction &
equipment 9,907 10,778 16,904 17,830
Facilities 1,815 976 1,990 1,148
Other 212 110 325 469
---------- ---------- ---------- ----------
Total Maintenance Capital
Expenditures 15,835 15,794 29,560 29,779
---------- ---------- ---------- ----------
Total Capital Expenditures $ 21,102 $ 15,902 $ 35,970 $ 30,769
========== ========== ========== ==========
(1) Our capital expenditures are broadly defined as pertaining to either
growth or maintenance activities. Growth capital expenditures are defined
as costs related to development of new airspace, permit expansions, 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 new
business as well as expenditures associated with increasing infrastructure
to increase throughput at transfer stations and recycling facilities.
Maintenance capital expenditures are defined as landfill cell construction
costs not related to expansion airspace, costs for normal permit renewals,
and replacement costs for equipment due to age or obsolescence.
Contact InformationNed Coletta Vice President of Finance and Investor Relations (802) 772-2239Ed Johnson Chief Financial Officer (802) 772-2241 http://www.casella.com
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