SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of Earliest Event Reported): June 28, 2000 ------------- CASELLA WASTE INDUSTRIES, INC.. -------------------------------------------------- (Exact Name of Registrant as Specified in Charter) Delaware ---------------------------------------------- (State or Other Jurisdiction of Incorporation) 0-23211 03-0338873 ------------------------ ------------------------------------ (Commission File Number) (I.R.S. Employer Identification No.) 25 Greens Hill Lane, P.O. Box 866 Rutland, Vermont 05701 ---------------------------------------- ------- (Address of Principal Executive Offices) (Zip Code) (802) 775-0325 ---------------------------------------------------- (Registrant's Telephone Number, Including Area Code) Not Applicable ------------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report)
ITEM 5. OTHER EVENTS. On June 28, 2000, the Registrant announced that it had entered into a Preferred Stock Purchase Agreement with Berkshire Partners of Boston, Massachusetts to issue shares of preferred stock which may convert into Class A Common Stock at $14.00 per share. The Registrant expects to raise approximately $55 million in the transaction. The closing of the transaction is subject to receipt of regulatory approvals and other customary closing conditions. A copy of the Registrant's press release announcing the signing of the Preferred Stock Purchase Agreement is attached as Exhibit 99.1. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. (c) EXHIBITS. 99.1 Press Release regarding Preferred Stock Purchase Agreement dated June 28, 2000. -2-
SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: June 30, 2000 CASELLA WASTE INDUSTRIES, INC. ------------------------------ (Registrant) By: /s/ JOHN W. CASELLA -------------------------- John W. Casella President and Secretary -3-
EXHIBIT INDEX Exhibit Number Description - ------ ----------- 99.1 Press Release regarding Preferred Stock Purchase Agreement dated June 28, 2000. -4-
EXHIBIT 99.1 PREFERRED STOCK PURCHASE AGREEMENT PRESS RELEASE CASELLA WASTE SYSTEMS, INC. REPORTS EARNINGS OF 19 CENTS PER SHARE IN FOURTH QUARTER OF FISCAL 2000 COMPANY ANNOUNCES NEW FINANCING, AND RESTRUCTURING OF NON-CORE BUSINESSES; GIVES GUIDANCE ON FISCAL YEAR 2001 RUTLAND, VERMONT (June 28, 2000)--Casella Waste Systems, Inc. (NASDAQ: CWST), a regional, non-hazardous solid waste services company, today reported financial results for the fourth quarter of its 2000 fiscal year. For the quarter ended April 30, 2000, the company reported net income of $4.3 million, versus $1.4 million for the same period last year, a 207 percent increase. Fully diluted earnings per share for the quarter were $0.19. Revenue for the quarter was $134.0 million versus $46.4 million for the same period a year ago. EBITDA (earnings before interest, taxes, depreciation and amortization) increased 156 percent to $30.0 million, compared to $11.7 million in the same period last year. For the fiscal year ended April 30, 2000, the company reported net income of $16.5 million; revenues for the year were $337.3 million. EBITDA was $84.4 million. Results for the three- and twelve-month periods are pro forma, and exclude the impact of a write-off of unamortized debt acquisition costs; the loss and write-off, primarily non-cash, related to the discontinuation and loss on sale of certain non-core operations; non-cash equity loss on investment; merger costs which occurred in the first quarter; and a gain on the sale of a company metal facility. "Both our company's performance and the markets we serve continue to be marked by strong underlying fundamentals," John Casella, president and CEO of Casella Waste Systems, said. "Once again, one of the most compelling indicators of this fundamental strength is the consistent delivery of our EBITDA margin targets." CELLULOSE INSULATION BUSINESS STRUCTURED AS A JOINT VENTURE The company also said it had entered into an agreement with Louisiana-Pacific Corp. (NYSE: LPX) to combine their respective cellulose insulation businesses into a single operating entity under a joint venture agreement effective July 1, 2000. The new company, to be known as U.S. GreenFiber LLC, is an equally owned joint venture formed through the combination of Louisiana-Pacific's GreenStone Industries Inc. and Casella Waste Systems' U.S. Fibers operations. The new entity will supply
cellulose insulation to existing residential construction, retail and manufactured housing supply channels. GreenFiber's operations, which will produce approximately $100 million in revenues, will be handled by a single management team located in Charlotte, North Carolina. "This joint venture combines Louisiana-Pacific's manufacturing expertise with our capacity to be a stable long-term supplier of high quality fiber, making GreenFiber the nation's lowest cost, largest manufacturer of cellulose insulation," Casella said. "While U.S. Fibers was not by any stretch a `core' solid waste business, there is a compelling opportunity to be part of building a strong, cash flow-generating operation that, at the very least, is a path towards monetizing that business at a higher valuation than currently exists," Casella said. "This restructuring gives us this flexibility, at the same time mitigating its financial impact." COMPANY RAISING CAPITAL THROUGH CONVERTIBLE PREFERRED STOCK The company announced that it has entered into an agreement with Berkshire Partners of Boston, Massachusetts to issue convertible preferred stock which may convert into Class A Common Stock at $14.00 per share. The company expects to raise approximately $55 million in the transaction, which the company believes will be instrumental in strengthening its financial foundation, allow it to continue to execute its growth plan, as well as allowing other strategic initiatives. The closing of the transaction is subject to receipt of regulatory approvals and other customary closing conditions. PLASTICS MANUFACTURING BUSINESS HELD FOR SALE The company also announced that it is selling its plastics manufacturing business, and is carrying the business as an asset held for sale at its realizable net value. "This line of business has not performed to expectations and, it does not warrant the required investment of management time and resources," Casella said. "As a result, it will be sold." EARNINGS PROJECTION FOR FISCAL YEAR 2001 The company also said it is adjusting its projected earnings per share for fiscal year 2001, which began on May 1, 2000. The company said it expects net income of approximately $19.5 million, or $0.72 per share, and EBITDA to be approximately $133.0 million. "We remain driven to create long-term value, and continue to focus on EBITDA as our performance yardstick," Casella said. "The shift in EBITDA for 2001 to $133 million from $140 million is primarily due to moving our cellulose insulation business into a joint venture and discontinuing our plastics operation," Casella said. "It is an indication that our core businesses will
continue to perform as expected. "The shift in EPS is primarily the result of a higher book income tax rate, higher goodwill amortization expenses associated with the KTI acquisition, higher interest rate expenses, and the impact of preferred stock--items we strongly believe do not reflect the health of our core businesses, or our ability to create long-term value," Casella said. "Our historically proven approach has always been to aggregate quality assets strategically, integrate and rationalize them, and generate attractive EBITDA margins," Casella said. "We are, in a fundamental and disciplined way, executing this strategy once again with the former KTI assets--integrating and polishing, reinvesting where necessary, and building a market-focused business that, over time, we expect should deliver the desired results." Casella Waste Systems, headquartered in Rutland, Vermont, is a regional, integrated, non-hazardous solid waste services company that provides collection, transfer, disposal and recycling services primarily in the northeastern United States. For further information, contact Joseph Fusco, vice president; or Jerry Cifor, chief financial officer at (802) 775-0325. The company's website is http://www.casella.com. The company will host a conference call to discuss these results on Thursday, June 29, 2000 at 10:00 a.m. EDT. Individuals interested in participating in the call should dial 913-981-4910 at least 10 minutes before start time. A replay of the call will be available by calling 719-457-0820 (conference code 776641) before 11:59 p.m. EDT, Thursday, July 6, 2000. This press release contains forward-looking statements that involve a number of risks and uncertainties. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are the ability of the Company to realize the anticipated synergies and other operating benefits from the acquisition of KTI, the Company's ability to manage growth, the accuracy of the company's financial projections, a history of losses, the ability to identify, acquire and integrate acquisition targets, dependence on management, the uncertain ability to finance the company's growth, limitations on landfill permitting and expansion and geographic concentration, changes in the market prices of recyclable materials, and the risk factors detailed from time to time in the company's periodic reports and registration statements filed with the Securities and Exchange Commission.
CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS Three Months Ended Year Ended ---------------------------------- ---------------------------------- April 30, April 30, April 30, April 30, (000's omitted) 1999(1) April 30, 2000(2) 1999(1) April 30, 2000 (2) (restated) 2000 (proforma) (restated) 2000 (proforma) --------- --------- --------- --------- --------- --------- Revenues $ 46,352 $ 133,919 $ 133,919 $ 182,556 $ 337,347 $ 337,347 --------- --------- --------- --------- --------- --------- Operating Expenses: Cost of Operations 27,314 87,906 87,906 108,874 210,733 210,733 General and Administrative 6,523 15,969 15,969 26,616 42,263 42,263 Depreciation and Amortization 6,661 14,448 14,448 25,725 40,211 40,211 Merger Costs (Pooling) 786 0 0 1,951 1,491 0 --------- --------- --------- --------- --------- --------- 41,284 118,323 118,323 163,166 294,698 293,207 --------- --------- --------- --------- --------- --------- Operating Income 5,068 15,596 15,596 19,390 42,649 44,140 --------- --------- --------- --------- --------- --------- Other (Income) Expenses Interest Expense, Net 1,397 7,068 7,068 5,564 15,051 15,051 Other Expense (Income), net (96) 2,623 2,623 (352) 1,999 1,999 Loss on Sale of Assets 0 0 (1,152) 0 0 (1,152) Equity Loss on Investment 0 0 (840) 0 0 (840) Add Back Gain on Sale of Facility 0 0 0 0 0 128 --------- --------- --------- --------- --------- --------- 1,301 9,691 7,699 5,212 17,050 15,186 --------- --------- --------- --------- --------- --------- Income from Continuing Operations before Income Taxes and Extraordinary Items 3,767 5,905 7,897 14,178 25,599 28,954 Provision for Income Taxes 2,265 3,524 3,553 7,531 12,257 12,475 --------- --------- --------- --------- --------- --------- Income from Continuing Operations 1,502 2,381 4,344 6,647 13,342 16,479 Discontinued Operations, Net of Tax Effect: (Income)/Loss from Discontinued Operations 97 0 0 33 269 0 Loss on Disposal of Discontinued Operations 0 0 0 0 1,393 0 Total Discontinued Operations 97 0 0 33 1,662 0 Extraordinary Item, Net of Tax Effect: Early Extinguishment of Debt 0 0 0 0 631 0 Net Income 1,405 2,381 4,344 6,614 11,049 16,479 ========= ========= ========= ========= ========= ========= EBIT 5,068 15,596 15,596 19,390 42,649 44,140 EBITDA 11,729 30,044 30,044 45,115 82,860 84,351 Common Stock and Common Stock Equivalent Shares Outstanding, Assuming Full Dilution 16,342 23,476 23,476 16,000 19,272 19,272 ========= ========= ========= ========= ========= ========= Diluted Earnings per Share $ 0.09 $ 0.10 $ 0.19 $ 0.41 $ 0.57 $ 0.86 ========= ========= ========= ========= ========= ========= The accompanying notes are an integral part of these consolidated financial statements. NOTES: (1) Financial Statements have been restated to reflect the following merger transactions, all accounted for as poolings of interests: Resource Waste Systems, Inc., Resource Transfer Services, Inc., and Resource Recovery of Cape Cod, Inc. (Collectively "Resource Waste Systems") Corning Community Disposal, Inc. (2) The year ended April 30, 2000 pro forma results exclude merger costs in the amount of $1,491,000 which occurred during the first quarter. Additionally, the pro forma results exclude the impact of discontinued operations, early extinguishment of debt, loss on sale of assets, and equity loss on investment. The pro forma results also exclude the one-time gain on the sale of a metal facility in the amount of $128,000
CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) Three Months Ended Year Ended ----------------------------------------------------------- ---------- July 31, October 31, January 31, 1998 (1) 1998 (1) 1999 (1) April 30, April 30, (restated) (restated) (restated) 1999 1999 ------------ ------------ ------------ ------------ ---------- Revenues $ 42,666,782 $ 45,035,237 $ 41,983,753 $ 133,919 #REF! ------------ ------------ ------------ ------------ ---------- Operating Expenses: Cost of Operations 25,265,226 25,911,885 24,104,279 87,906 #REF! General and Administrative 6,171,864 6,488,330 6,618,448 15,969 #REF! Depreciation and Amortization 5,742,705 6,502,722 6,226,358 14,448 #REF! Merger Costs (Pooling) 16,788 766,509 393,693 0 #REF! ------------ ------------ ------------ ------------ ---------- 37,196,583 39,669,446 37,342,778 118,323 #REF! ------------ ------------ ------------ ------------ ---------- Operating Income 5,470,199 5,365,791 4,640,975 15,596 #REF! ------------ ------------ ------------ ------------ ---------- Other (Income) Expenses Interest Expense, Net 1,803,651 827,274 1,089,958 7,068 #REF! Other Expense (Income), net (256,828) 66,844 (65,378) 2,623 #REF! ------------ ------------ ------------ ------------ ---------- 1,546,823 894,118 1,024,580 9,691 #REF! ------------ ------------ ------------ ------------ ---------- Income Before Provision for Income Taxes and Extraordinary Items 3,923,376 4,471,673 3,616,395 5,905 #REF! Provision for Income Taxes 1,675,208 1,917,911 1,714,279 3,524 #REF! ------------ ------------ ------------ ------------ ---------- Net Income 2,248,168 2,553,762 1,902,116 2,381 #REF! ============ ============ ============ ============ ========== EBIT 5,470,199 5,365,791 4,640,975 15,596 #REF! EBITDA 11,212,904 11,868,513 10,867,333 30,044 #REF! Common Stock and Common Stock Equivalent Shares Outstanding, Assuming Full Dilution 14,047,340 16,208,222 16,323,886 15,979,045 15,636,859 ============ ============ ============ ============ ========== Diluted Earnings per Share $ 0.160 $ 0.158 $ 0.117 $ 0.000 #REF! ============ ============ ============ ============ ========== The accompanying notes are an integral part of these consolidated financial statements. NOTES: (1) Financial Statements have been restated to reflect the following merger transactions, all accounted for as poolings of interest: Waste Stream Inc., B&C Sanitation Corporation, Collectively "Waste Stream" North Country Trucking, Inc., Better Bedding Corp., R.A. Bronson, Inc., BBC LLC, NTC LLC and Grasslands, Inc. Northern Sanitation, Inc. and Northern Properties Corp. Collectively "Northern Sanitation" Consummated 12/23/98 of Plattsburgh, Inc. Natural Environmental, Inc., Schultz Landfill, Inc., Collectively "NEI" Consummated 4/30/99 and Blasdell Development Group, Inc. Westfield Disposal Service, Inc., and Portland C & D Collectively "Westfield Disposal" Consummated 4/30/99 Landfill, Inc.
CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) Three Months Ended Nine Months Ended ------------------------------------------- ------------------------------------------- January 31, January 31, January 31, January 31, 1999(1) January 31, 2000(2) 1999(1) January 31, 2000 (2) (restated) 2000 (proforma) (restated) 2000 (proforma) ------------- ------------- ------------- ------------- ------------- ------------- Revenues $ 44,109,000 $ 93,003,878 $ 93,003,878 $ 136,204,000 $ 203,427,563 $ 203,427,563 ------------- ------------- ------------- ------------- ------------- ------------- Operating Expenses: Cost of Operations 26,351,000 61,451,815 61,451,815 81,560,000 122,825,887 122,825,887 General and Administrative 7,060,000 11,413,226 11,413,226 20,093,000 26,293,631 26,293,631 Depreciation and Amortization 6,481,000 10,193,287 10,193,287 19,064,000 25,762,736 25,762,736 Merger Costs (Pooling) 468,000 0 0 1,165,000 1,490,426 0 ------------- ------------- ------------- ------------- ------------- ------------- 40,360,000 83,058,328 83,058,328 121,882,000 176,372,680 174,882,254 ------------- ------------- ------------- ------------- ------------- ------------- Operating Income 3,749,000 9,945,550 9,945,550 14,322,000 27,054,883 28,545,309 ------------- ------------- ------------- ------------- ------------- ------------- Other (Income) Expenses Interest Expense, Net 1,285,000 4,774,341 4,774,341 4,167,000 7,983,356 7,983,356 Other Expense (Income), net (65,000) (119,774) (119,774) (256,000) (623,576) (623,576) Gain on Sale of Facility 0 0 0 0 0 0 ------------- ------------- ------------- ------------- ------------- ------------- 1,220,000 4,654,567 4,654,567 3,911,000 7,359,780 7,359,780 ------------- ------------- ------------- ------------- ------------- ------------- Income Before Provision for Income Taxes Discontinued Operations and Extraordinary Items 2,529,000 5,290,983 5,290,983 10,411,000 19,695,103 21,185,529 Provision for Income Taxes 1,689,000 2,433,483 2,433,483 5,266,000 8,611,188 8,921,871 ------------- ------------- ------------- ------------- ------------- ------------- Net Income from Continuing Operations 840,000 2,857,500 2,857,500 5,145,000 11,083,915 12,263,658 Discontinued Operations, Net of Tax Effect: (Gain)/Loss from Discontinued Operations (2) (39,000) 78,564 0 (64,000) 269,083 0 Loss on Disposal of Discontinued Operations (2) 0 1,393,232 0 0 1,393,232 0 Total Discontinued Operations (39,000) 1,471,796 0 (64,000) 1,662,315 0 Extraordinary Items, Net of Tax Effect: Early Extinguishment of Debt (2) 0 631,283 0 0 631,283 0 Net Income 879,000 754,421 2,857,500 5,209,000 8,790,317 12,263,658 ============= ============= ============= ============= ============= ============= EBIT 3,749,000 9,945,550 9,945,550 14,322,000 27,054,883 28,545,309 EBITDA 10,230,000 20,138,837 20,138,837 33,386,000 52,817,619 54,308,045 Common Stock and Common Stock Equivalent Shares Outstanding, Assuming Full Dilution 16,687,000 20,265,517 20,265,517 15,890,000 16,506,818 16,506,818 ============= ============= ============= ============= ============= ============= Diluted Earnings per Share $ 0.050 $ 0.037 $ 0.141 $ 0.328 $ 0.533 $ 0.743 ============= ============= ============= ============= ============= ============= The accompanying notes are an integral part of these consolidated financial statements. NOTES: (1) Financial Statements have been restated to reflect the following merger transactions, all accounted for as poolings of interests: Natural Environmental, Inc., Schultz Landfill, Inc., Collectively "NEI" and Blasdell Development Group, Inc. Westfield Disposal Service, Inc., and Portland C & D Collectively "Westfield Disposal" Landfill, Inc. Resource Waste Systems, Inc., Resource Transfer Services, Inc., and Resource Recovery of Cape Cod, Inc. (Collectively "Resource Waste Systems") Corning Community Disposal, Inc. (2) The quarter ended January 31, 2000 pro forma results and the nine months ended January 31, 2000 pro forma results exclude merger costs in the amount of $1,490,426 which occurred during the first quarter. Additionally, the proforma results exclude the effects of losses from discontinued operations of Aaron and Sons (net of tax effect ) and the early extinguishment of debt (net of tax effect)
CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES RECONCILIATION OF QUARTERS (UNAUDITED) Actual October January 31, Effects of 9 Month 31 2000 Discontinued January 1999 3 month Operations 2000 ------------- ------------- ------------- ------------- Revenues $ 111,155,871 $ 93,003,878 ($ 732,188) $ 203,427,561 ------------- ------------- ------------- ------------- Operating Expenses: Cost of Operations 62,036,630 61,451,815 (662,558) $ 122,825,887 General and Administrative 15,161,560 11,413,226 (281,154) $ 26,293,632 Depreciation and Amortization 15,666,771 10,193,287 (97,322) $ 25,762,736 Merger Costs (Pooling) 1,490,426 0 0 $ 1,490,426 ------------- ------------- ------------- ------------- 94,355,387 83,058,328 (1,041,034) 176,372,681 ------------- ------------- ------------- ------------- Operating Income 16,800,484 9,945,550 308,846 27,054,880 ------------- ------------- ------------- ------------- Other (Income) Expenses Interest Expense, Net 3,212,496 4,774,341 (3,480) $ 7,983,357 Other Expense (Income), net (503,802) (119,774) 0 ($ 623,576) Gain on Sale of Facility 0 0 0 $ 0 ------------- ------------- ------------- ------------- 2,708,694 4,654,567 (3,480) 7,359,781 ------------- ------------- ------------- ------------- Income Before Provision for Income Taxes Discontinued Operations and Extraordinary Items 14,091,790 5,290,983 312,326 19,695,099 Provision for Income Taxes 6,177,705 2,433,483 121,807 $ 8,732,995 ------------- ------------- ------------- ------------- Net Income from Continuing Operations 7,914,085 2,857,500 190,519 10,962,104 Discontinued Operations, Net of Tax Effect: (Gain)/Loss from Discontinued Operations (2) 0 78,564 190,519 $ 269,083 Loss on Disposal of Discontinued Operations (2) 0 1,393,232 0 $ 1,393,232 Total Discontinued Operations 0 1,471,796 190,519 1,662,315 Extraordinary Items, Net of Tax Effect: Early Extinguishment of Debt (2) 0 631,283 0 $ 631,283 Net Income 7,914,085 754,421 0 8,668,506 ============= ============= ============= ============= EBIT 16,800,484 9,945,550 27,054,880 EBITDA 32,467,255 20,138,837 52,817,616 Common Stock and Common Stock Equivalent Shares Outstanding, Assuming Full Dilution 16,506,818 20,265,517 17,758,558 ============= ============= ============= Diluted Earnings per Share $ 0.479 $ 0.037 $ 0.617 ============= ============= ============= Proforma October January 31, Effects of 9 Month 31 2000 Discontinued January 1999 3 month Operations 2000 ------------- ------------- ------------- ------------- Revenues $ 111,155,871 $ 93,003,878 $ 0 $ 204,159,749 ------------- ------------- ------------- ------------- Operating Expenses: Cost of Operations 62,036,630 61,451,815 0 $ 123,488,445 General and Administrative 15,161,560 11,413,226 0 $ 26,574,786 Depreciation and Amortization 15,666,771 10,193,287 0 $ 25,860,058 Merger Costs (Pooling) 0 0 0 $ 0 ------------- ------------- ------------- ------------- 92,864,961 83,058,328 0 175,923,289 ------------- ------------- ------------- ------------- Operating Income 18,290,910 9,945,550 0 28,236,460 ------------- ------------- ------------- ------------- Other (Income) Expenses Interest Expense, Net 3,212,496 4,774,341 0 $ 7,986,837 Other Expense (Income), net (503,802) (119,774) 0 ($ 623,576) Gain on Sale of Facility 128,213 0 0 $ 128,213 ------------- ------------- ------------- ------------- 2,836,907 4,654,567 0 7,491,474 ------------- ------------- ------------- ------------- Income Before Provision for Income Taxes Discontinued Operations and Extraordinary Items 15,454,003 5,290,983 0 20,744,986 Provision for Income Taxes 6,488,388 2,433,483 0 $ 8,921,871 ------------- ------------- ------------- ------------- Net Income from Continuing Operations 8,965,615 2,857,500 0 11,823,115 Discontinued Operations, Net of Tax Effect: (Gain)/Loss from Discontinued Operations (2) 0 0 0 $ 0 Loss on Disposal of Discontinued Operations (2) 0 0 0 $ 0 Total Discontinued Operations 0 0 0 0 Extraordinary Items, Net of Tax Effect: Early Extinguishment of Debt (2) 0 0 0 $ 0 Net Income 8,965,615 2,857,500 0 11,823,115 ============= ============= ============= ============= EBIT 18,290,910 9,945,550 28,236,460 EBITDA 33,957,681 20,138,837 54,096,518 Common Stock and Common Stock Equivalent Shares Outstanding, Assuming Full Dilution 16,506,818 20,265,517 17,758,558 ============= ============= ============= Diluted Earnings per Share $ 0.543 $ 0.141 $ 0.666 ============= ============= ============= The accompanying notes are an integral part of these consolidated financial statements. NOTES: (1) Financial Statements have been restated to reflect the following merger transactions, all accounted for as poolings of interests: Natural Environmental, Inc., Schultz Landfill, Inc., Collectively "NEI" and Blasdell Development Group, Inc. Westfield Disposal Service, Inc., and Portland C & D Collectively "Westfield Disposal" Landfill, Inc. Resource Waste Systems, Inc., Resource Transfer Services, Inc., and Resource Recovery of Cape Cod, Inc. (Collectively "Resource Waste Systems") Corning Community Disposal, Inc. (2) The quarter ended January 31, 2000 pro forma results and the nine months ended January 31, 2000 pro forma results exclude merger costs in the amount of $1,490,426 which occurred during the first quarter. Additionally, the proforma results exclude the effects of losses from discontinued operations of Aaron and Sons (net of tax effect ) and the early extinguishment of debt (net of tax effect)