EX-99.1 2 a08-16952_1ex99d1.htm EX-99.1

Exhibit 99.1

 

FOR IMMEDIATE RELEASE

 

CASELLA WASTE SYSTEMS, INC. ANNOUNCES FOURTH QUARTER AND FISCAL 2008 RESULTS; PROVIDES FISCAL YEAR 2009 GUIDANCE

 

Casella exceeds original 2008 fiscal year EBITDA* guidance and was at the high-end of original free cash flow* guidance

 

RUTLAND, VERMONT (June 18, 2008)— Casella Waste Systems, Inc. (NASDAQ: CWST), a regional solid waste, recycling and resource management services company, today reported financial results for the fourth quarter and its 2008 fiscal year, and gave guidance on its 2009 fiscal year.

 

“This was an exciting year for our team. We made great progress on all of the operational and financial goals we set at the beginning of the year, even in the face of a weak economy in the Northeast,” John W. Casella, chairman and CEO of Casella Waste Systems, said. “We exceeded our original fiscal year 2008 EBITDA* guidance and we were at the high-end of the free cash flow* guidance that we issued last June.”

 

Fourth Quarter Results

 

For the quarter ended April 30, 2008, the company reported revenues of $139.6 million, up $12.9 million or 10.2 percent over the same quarter last year. The company’s net loss per common share was ($0.31), versus net loss per share of ($0.80) in the same quarter last year; both quarters include non-recurring charges.

 

The net loss per share for the quarter ended April 30, 2008, reflects the following non-recurring charges: an impairment and closing charge of $1.4 million for the closure of the Hardwick landfill; development project charges of $0.5 million; and a $2.0 million after-tax loss from discontinued operations and the loss on disposal of discontinued operations.

 

Excluding the non-recurring charges outlined above, the net loss for the quarter amounted to ($4.7) million or ($0.18) per common share; as compared to a net loss of ($1.7) million or ($0.07) for the same quarter last year excluding non-recurring charges.

 

Operating income for the quarter was $5.5 million, reflecting the impact of the non-recurring charges outlined above, versus an operating loss of ($19.7) million in the fourth quarter last year. Excluding the non-recurring charges in both periods, operating income for the current quarter was $7.5 million, down $0.5 million or 6.3 percent over the same period last year.

 

Net cash provided by operating activities in the quarter was $20.1 million. The company’s earnings before interest, taxes, depreciation and amortization, Hardwick impairment and closing charge, and development project charges (EBITDA*) were $26.2 million, up $1.0 million or 4.2 percent over the same quarter last year.

 



 

Fiscal 2008 Results

 

For the fiscal year ended April 30, 2008, the company reported revenues of $579.5 million, up $48.2 million or 9.1 percent over fiscal year 2007. The fiscal year net loss per common share was ($0.31) versus a net loss per share of ($0.85) in the previous fiscal year.

 

The net loss per share for the fiscal year ended April 30, 2008 reflects the following non-recurring charges: an impairment and closing charge of $1.4 million for the closure of the Hardwick landfill; development project charges of $0.5 million; a $3.8 million after-tax loss from discontinued operations and the loss on disposal of discontinued operations; and the $1.2 million expenses incurred as the result of the company’s management reorganization during the third quarter of fiscal year 2008.

 

Excluding the non-recurring charges outlined above, the fiscal year 2008 net loss amounted to ($2.1) million or ($0.08) per common share; as compared to a net loss of ($1.8) million or ($0.07) for the same period last year excluding non-recurring charges.

 

The company said its GreenFiber unit continues to be severely impacted by the slowdown in the housing market. The company’s income from equity method investments in fiscal year 2008 was down $7.1 million over fiscal year 2007, resulting in a negative year-over-year after tax impact of ($0.20) per share.  Excluding the negative year-over-year impact from equity method investments and the above listed non-recurring charges, the fiscal year 2008 earnings per common share was $0.12 per common share.

 

Operating income for fiscal year 2008 was $42.6 million, reflecting the impact of the non-recurring charges noted above, versus $12.2 million for fiscal year 2007.  Excluding the non-recurring charges in both years, operating income for the current year was $45.7 million, up $5.9 million or 14.8 percent over the same period last year.

 

The company’s EBITDA* for fiscal year 2008 was $122.3 million versus $110.6 million for fiscal year 2007, up $11.7 million or 10.6 percent over the same period last year. Excluding the one-time management reorganization charge, EBITDA was $123.5 million, up $12.9 million, or 11.7 percent over the same period last year.

 

The company also announced that net cash provided by operating activities for fiscal year 2008 was $71.8 million. The company’s free cash flow* for fiscal year 2008 was $5.3 million versus ($18.6) million for fiscal year 2007, up $23.9 million over the same period last year. As of April 30, 2008, the company had cash on hand of $2.8 million, and had an outstanding total debt level of $552.5 million.

 

More detailed financial results are contained in the tables accompanying this release.

 

2008 Highlights

 

“At the beginning of fiscal year 2008, we laid out a comprehensive operating and capital strategy that focused on generating positive free cash flow and improving returns,” Casella said.

 



 

“The main drivers of the strategy were harvesting value from landfill investments, improving operations and reducing costs, and strategically focusing on capital deployment.  We have performed extremely well against these drivers during the year, improving free cash flow by $23.9 million and improving return on net assets by over 80 basis points.”

 

“Highlights of the fiscal year include:

 

·                  the cost reduction programs launched in fiscal year 2008 have yielded approximately $4.1 million of savings on an annualized basis, through the reorganization of certain assets into market areas, cost savings from improved purchasing, and specific operating initiatives;

 

·                  during the second quarter, the company received a modification to the existing permit for the operation of its Hakes construction and demolition (C&D) landfill, that increased the annual permit to 457,164 tons per year from 306,000 tons per year;

 

·                  during the second quarter, Ontario County received a modification to the existing permit for the operation of the municipal solid waste (MSW) landfill that increased the annual permit to 917,694 tons per year from 612,000 tons per year;

 

·                  during the third quarter, the company received approval from the U.S. Environmental Protection Agency’s Climate Leaders Program for a companywide greenhouse gas emissions reduction target of ten percent over seven years, from 2005 to 2012;

 

·                  during the fourth quarter, the company completed the conversion of its Camden materials processing facility from a dual-stream configuration to a single-stream system;

 

·                  during the fourth quarter, the company executed a 15 year operating agreement commencing October 2008, to operate the materials processing facility for the Resource Recovery and Recycling Authority of Southwest Oakland County, Michigan (Detroit);

 

·                  The company completed its plan to divest, swap, or close underperforming and non-strategic operations amounting to over $22.0 million of annual revenues, with the sale of the Holliston, Massachusetts transfer station on April 30, 2007; the sale of the Buffalo, New York transfer station, hauling operation and related equipment on October 31, 2007; the termination of operations at MTS Environmental soils processing facility in Epsom, New Hampshire during the fourth quarter of fiscal year 2008; and the pending first quarter of fiscal year 2009 sale of the Greenville, South Carolina materials processing facility; and

 

·                  in early June 2008, the company received a positive vote from the Southbridge Massachusetts Board of Health to amend the landfill’s site assignment allowing the site to receive municipal solid waste (MSW) from communities other than

 



 

Southbridge, and to expand the annual permit to 405,600 tons per year from 180,960 tons per year.

 

Fiscal 2009 Outlook

 

“Looking forward to fiscal year 2009, our plan focuses on the same key factors from the past year, with a particular emphasis on improving the performance of our base operations and selectively pursuing opportunities that meet emerging customer and market needs,” Casella said. “Paul Larkin joined our team as President and Chief Operating Officer in early January, and with Paul’s leadership we have introduced new programs to further improve the operational performance of our businesses.”

 

The company also announced its guidance for fiscal year 2009, which began May 1, 2008.

 

For fiscal year 2009, the company estimates results in the following ranges:

 

·                  Revenues between $610.0 million and $628.0 million;

 

·                  EBITDA* between $128.0 million and $132.0 million;

 

·                  Capital expenditures between $73.0 million and $77.0 million; and

 

·                  Free cash flow* between $8.0 million and $14.0 million.

 

The company said the following assumptions are built into its fiscal year 2009 outlook:

 

·                  Zero-growth in the regional economy;

 

·                  In the solid waste business, price growth of 2.0 percent, with overall volumes up 1.0 percent on increased landfill volumes at Hakes and Ontario landfills;

 

·                  In the recycling business, pricing flat, with volumes up slightly;

 

·                  One landfill gas-to-energy facility becoming fully operational during the first half of the fiscal year, construction underway on a second landfill gas-to-energy facility with operations expected to commence in the second half of the fiscal year, and construction expected to begin on two additional facilities during the first half of the fiscal year.

 

·                  Two zerosort™ (single-stream) conversions or upgrades planned during the fiscal year and one new materials processing facility contract commencing late in the third quarter of fiscal year 2009;

 

·                  Focus on reducing costs through operational improvements and best practice programs; and

 

·                  No acquisitions.

 

Free cash flow of $8.0 million to $14.0 million is based on net cash provided by operating activities of $80.0 million to $84.0 million, less estimated maintenance capital expenditures of $60.0 million, growth capital expenditures of $13.0 million to $17.0 million, and other balance sheet changes.

 



 

“As the broad reaching impacts of increasing global economic prosperity continue to drive consumption, resulting in resource constraints, our strategy to transform traditional waste streams into renewable resources is becoming more and more important to our customers,” Casella said. “Over the next several years we plan to selectively pursue opportunities in waste transformation that meet emerging customer and market needs.”

 

*Non-GAAP Financial Measures

 

In addition to disclosing financial results prepared in accordance with Generally Accepted Accounting Principles (GAAP), we also disclose free cash flow and earnings before interest, taxes, depreciation and amortization, Hardwick impairment and closing charge, and development project charges (EBITDA), which are non-GAAP measures.

 

These measures are provided because we understand that certain investors use this information when analyzing the financial position of companies in the solid waste industry, including us. Historically, these measures have been key in comparing operating efficiency of publicly traded companies in the solid waste industry, and assist investors in measuring our ability to meet capital expenditures, payments on landfill operating lease contracts, and working capital requirements. For these reasons we utilize these non- GAAP metrics to measure our performance at all levels. Free cash flow and EBITDA are not intended to replace “Net Cash Provided by Operating Activities,” which is the most comparable GAAP financial measure.  Moreover, these measures do not necessarily indicate whether cash flow will be sufficient for such items as capital expenditures, payments on landfill operating lease contracts, or working capital, or to react to changes in our industry or to the economy generally. Because these measures are not calculated by all companies in the same fashion, they may not be comparable to similarly titled measures reported by other companies.

 

Casella Waste Systems, Inc., headquartered in Rutland, Vermont, provides solid waste management services consisting of collection, transfer, disposal, and recycling services primarily in the eastern United States.

 

For further information, contact Ned Coletta, director of investor relations at (802) 775-0325, or visit the Company’s website at http://www.casella.com.

 

The Company will host a conference call to discuss these results on Thursday, June 19, 2008 at 10:00 a.m. ET. Individuals interested in participating in the call should dial (877) 591-4949 at least 10 minutes before start time. The call will also be webcast; to listen, participants should visit Casella Waste Systems’ website at http://www.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 719-457-0820 or 888-203-1112 (conference code #4207502), until 11:59 p.m. ET on Thursday, June 26, 2008.

 



 

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 the company “believes,” “expects,” “anticipates,” “plans,” “may,” “will,” “would,” “intends,” “estimates” 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 or expectations 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: we may be unable to reduce costs or increase revenues sufficiently to achieve estimated EBITDA and other targets; landfill operations and permit status may be affected by factors outside our control, continuing weakness in general economic conditions and poor weather conditions may affect our revenues; we may be required to incur capital expenditures in excess of our estimates; and 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. 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 April 30, 2007. We do not necessarily intend 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

CONSOLIDATED STATEMENTS OF OPERATIONS

Unaudited

(In thousands, except amounts per share)

 

 

 

Three Months Ended

 

Twelve Months Ended

 

 

 

April 30,

 

April 30,

 

April 30,

 

April 30,

 

 

 

2007

 

2008

 

2007

 

2008

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

126,715

 

$

139,628

 

$

531,325

 

$

579,517

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Cost of operations

 

84,002

 

94,329

 

347,550

 

383,009

 

General and administration

 

17,592

 

19,132

 

73,202

 

74,184

 

Depreciation and amortization

 

17,161

 

18,699

 

70,748

 

77,769

 

Hardwick impairment and closing charge

 

26,892

 

1,400

 

26,892

 

1,400

 

Development project charges

 

752

 

534

 

752

 

534

 

 

 

146,399

 

134,094

 

519,144

 

536,896

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

(19,684

)

5,534

 

12,181

 

42,621

 

 

 

 

 

 

 

 

 

 

 

Other expense/(income), net:

 

 

 

 

 

 

 

 

 

Interest expense, net (1)

 

9,683

 

9,658

 

37,127

 

41,505

 

Loss (income) from equity method investments

 

927

 

1,532

 

(1,051

)

6,077

 

Other income

 

(220

)

(273

)

(571

)

(2,690

)

 

 

10,390

 

10,917

 

35,505

 

44,892

 

 

 

 

 

 

 

 

 

 

 

Loss from continuing operations before income taxes and discontinued operations

 

(30,074

)

(5,383

)

(23,324

)

(2,271

)

Provision (benefit) for income taxes

 

(12,069

)

456

 

(7,849

)

1,746

 

 

 

 

 

 

 

 

 

 

 

Loss from continuing operations before discontinued operations

 

(18,005

)

(5,839

)

(15,475

)

(4,017

)

 

 

 

 

 

 

 

 

 

 

Discontinued Operations:

 

 

 

 

 

 

 

 

 

Loss from discontinued operations, net of income taxes (2) (3) (4) (5)

 

(652

)

(289

)

(1,691

)

(1,705

)

Loss on disposal of discontinued operations, net of income taxes (2) (3) (4)

 

(717

)

(1,675

)

(717

)

(2,113

)

 

 

 

 

 

 

 

 

 

 

Net loss

 

(19,374

)

(7,803

)

(17,883

)

(7,835

)

 

 

 

 

 

 

 

 

 

 

Preferred stock dividend

 

914

 

 

3,588

 

 

 

 

 

 

 

 

 

 

 

 

Net loss applicable to common stockholders

 

$

(20,288

)

$

(7,803

)

$

(21,471

)

$

(7,835

)

 

 

 

 

 

 

 

 

 

 

Common stock and common stock equivalent shares outstanding, assuming full dilution

 

25,318

 

25,443

 

25,272

 

25,382

 

 

 

 

 

 

 

 

 

 

 

Net loss per common share

 

$

(0.80

)

$

(0.31

)

$

(0.85

)

$

(0.31

)

 

 

 

 

 

 

 

 

 

 

EBITDA (6)

 

$

25,121

 

$

26,167

 

$

110,573

 

$

122,324

 

 



 

CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

Unaudited

(In thousands)

 

 

 

April 30,

 

April 30,

 

 

 

2007

 

2008

 

ASSETS

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

Cash and cash equivalents

 

$

12,366

 

$

2,814

 

Restricted cash

 

73

 

95

 

Accounts receivable - trade, net of allowance for doubtful accounts

 

60,363

 

62,233

 

Other current assets

 

21,998

 

30,343

 

Total current assets

 

94,800

 

95,485

 

 

 

 

 

 

 

Property, plant and equipment, net of accumulated depreciation

 

482,819

 

488,028

 

Goodwill

 

168,998

 

179,716

 

Intangible assets, net

 

2,217

 

2,608

 

Restricted cash

 

12,734

 

13,563

 

Investments in unconsolidated entities

 

49,969

 

44,617

 

Other non-current assets

 

22,556

 

12,070

 

 

 

 

 

 

 

Total assets

 

$

834,093

 

$

836,087

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

Current maturities of long-term debt

 

$

1,215

 

$

2,112

 

Current maturities of capital lease obligations

 

1,104

 

646

 

Series A redeemable, convertible preferred stock (1)

 

74,018

 

 

Accounts payable

 

51,122

 

51,731

 

Other accrued liabilities

 

60,693

 

58,335

 

Total current liabilities

 

188,152

 

112,824

 

 

 

 

 

 

 

Long-term debt, less current maturities

 

476,225

 

550,416

 

Capital lease obligations, less current maturities

 

650

 

8,811

 

Other long-term liabilities

 

39,570

 

39,354

 

 

 

 

 

 

 

Stockholders’ equity

 

129,496

 

124,682

 

 

 

 

 

 

 

Total liabilities and stockholders’ equity

 

$

834,093

 

$

836,087

 

 



 

CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Unaudited

(In thousands)

 

 

 

Twelve Months Ended

 

 

 

April 30,

 

April 30,

 

 

 

2007

 

2008

 

Cash Flows from Operating Activities:

 

 

 

 

 

Net loss

 

$

(17,883

)

$

(7,835

)

Loss from discontinued operations, net

 

1,691

 

1,705

 

Loss on disposal of discontinued operations, net

 

717

 

2,113

 

Adjustments to reconcile net loss to net cash provided by operating activities -

 

 

 

 

 

Gain on sale of equipment

 

(806

)

(387

)

Depreciation and amortization

 

70,748

 

77,769

 

Depletion of landfill operating lease obligations

 

7,021

 

6,010

 

Hardwick impairment and closing charge

 

26,892

 

1,400

 

Development project charges

 

752

 

534

 

Income from assets under contractual obligation

 

(190

)

(1,605

)

Preferred stock dividend

 

 

1,038

 

Maine Energy settlement

 

 

(2,142

)

Loss (income) from equity method investments

 

(1,051

)

6,077

 

Stock-based compensation

 

702

 

1,376

 

Excess tax benefit on the exercise of stock options

 

 

(103

)

Deferred income taxes

 

(11,246

)

(2,373

)

Changes in assets and liabilities, net of effects of acquisitions and divestitures

 

3,709

 

(11,762

)

 

 

96,531

 

75,832

 

Net Cash Provided by Operating Activities

 

81,056

 

71,815

 

Cash Flows from Investing Activities:

 

 

 

 

 

Acquisitions, net of cash acquired

 

(2,750

)

(11,881

)

Additions to property, plant and equipment - growth

 

(36,738

)

(18,950

)

- maintenance

 

(64,107

)

(54,224

)

Payments on landfill operating lease contracts

 

(4,995

)

(7,143

)

Proceeds from divestitures

 

7,383

 

2,373

 

Restricted cash from revenue bond issuance

 

5,535

 

 

Other

 

(1,598

)

4,138

 

Net Cash Used In Investing Activities

 

(97,270

)

(85,687

)

Cash Flows from Financing Activities:

 

 

 

 

 

Proceeds from long-term borrowings

 

267,525

 

301,200

 

Principal payments on long-term debt

 

(244,750

)

(223,692

)

Deferred financing costs

 

(582

)

(554

)

Redemption of Series A redeemable, convertible preferred stock

 

 

(75,056

)

Proceeds from exercise of stock options

 

1,608

 

1,367

 

Excess tax benefit on the exercise of stock options

 

 

103

 

Net Cash Provided by Financing Activities

 

23,801

 

3,368

 

Cash Provided by (Used in) Discontinued Operations

 

(2,646

)

952

 

Net (decrease) increase in cash and cash equivalents

 

4,941

 

(9,552

)

Cash and cash equivalents, beginning of period

 

7,425

 

12,366

 

Cash and cash equivalents, end of period

 

$

12,366

 

$

2,814

 

 



 

CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES

Unaudited

(In thousands)

 

Note 1:        The Company’s Series A redeemable, convertible preferred stock (“Series A preferred) contained a mandatory redemption provision effective August 11, 2007.  As the Company did not anticipate that the Series A preferred would be converted to Class A Common Stock by the redemption date, the Company reflected the redemption value of the Series A preferred as a current liability at April 30, 2007.  Consistent with this presentation, the Company has recorded the Series A preferred dividend as interest expense in the twelve months ended April 30, 2008.  The Series A preferred was redeemed effective August 11, 2007 at an aggregate redemption price of $75,057.

 

Note 2:        The Company divested the assets of the Holliston Transfer Station (“Holliston Transfer”) during the quarter ended April 30, 2007.  The transaction required discontinued operations treatment under SFAS No. 144 , Accounting for Impairment or Disposal of Long-Lived Assets (“SFAS No.144).  During the quarter ended April 30, 2008, the Company recorded the true-up of certain contingent liabilities associated with the Holliston transaction.  For the three and twelve months ended April 30, 2007 and 2008, the Company recorded a loss from discontinued operations (net of tax) of ($230), ($86), ($558) and ($86), respectively. For the three and twelve months ended April 30, 2007 and 2008, the company recorded a gain (loss) on disposal of discontinued operations (net of tax) of ($717), $319, ($717) and $319, respectively.   

 

Note 3:        The Company divested its Buffalo, N.Y. transfer station, hauling operation and related equipment during the quarter ended October 31, 2007.  The transaction required discontinued operations treatment under SFAS No. 144, therefore the operating results of these operations have been reclassified from continuing to discontinued operations for the three and twelve months ended April 30, 2007.  During the quarter ended April 30, 2008, the Company recorded the true-up of working capital associated with the transaction.  For the three and twelve months ended April 30, 2007 and 2008, the Company recorded a loss from discontinued operations (net of tax) of ($421), ($72), ($1,422) and ($883), respectively.  For the three and twelve months ended April 30, 2008, the company recorded a loss on disposal of discontinued operations (net of tax) of ($55) and ($493), respectively. 

 

Note 4:        The Company terminated its operation of MTS Environmental, a soils processing operation in the quarter ended April 30, 2008.  The transaction required discontinued operations treatment under SFAS No. 144, therefore the operating results of this operation have been reclassified from continuing to discontinued operations for the three and twelve months ended April 30, 2007.  For the three and twelve months ended April 30, 2007 and 2008, the Company recorded a loss from discontinued operations (net of tax) of ($108), ($102), ($56) and ($915), respectively.  For the three and twelve months ended April 30, 2008, the company recorded a loss on disposal of discontinued operations (net of tax) of ($1,939). 

 

Note 5:        The Company has deemed its FCR Greenville operation as held for sale effective April 30, 2008 and has classified this as a discontinued operation pursuant to the requirements of SFAS No 144.  The operating results have been reclassified from continuing to discontinued operations for the three and twelve months ended April 30, 2007.  For the three and twelve months ended April 30, 2007 and 2008, the Company recorded income (loss) from discontinued operations (net of tax) of $107, ($29), $345 and $179, respectively.  

 

Note 6:        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, Hardwick impairment and closing charge and development project charges (EBITDA) and free cash flow, which are non-GAAP measures.

 

These measures are provided because we understand that certain investors use this information when analyzing the financial position of the solid waste industry, including us. Historically, these measures have been key in comparing operating efficiency of publicly traded companies within the industry, and assist investors in measuring our ability to meet capital expenditures, payments on landfill operating lease contracts and working capital requirements. For these reasons, we utilize these non-GAAP metrics to measure our performance at all levels. EBITDA and free cash flow are not intended to replace “Net cash provided by operating activities”, which is the most comparable GAAP financial measure. Moreover, these measures do not necessarily indicate whether cash flow will be sufficient for such items as working capital, payments on landfill operating lease contracts or capital expenditures, or to react to changes in our industry or to the economy generally. Because these measures are not calculated by all companies in the same fashion, they may not be comparable to similarly titled measures reported by other companies.

 

Following is a reconciliation of EBITDA to Net Cash Provided by Operating Activities:

 

 

 

Three Months Ended

 

Twelve Months Ended

 

 

 

April 30,

 

April 30,

 

April 30,

 

April 30,

 

 

 

2007

 

2008

 

2007

 

2008

 

 

 

 

 

 

 

 

 

 

 

Net Cash Provided by Operating Activities

 

$

24,608

 

$

20,137

 

$

81,056

 

$

71,815

 

 

 

 

 

 

 

 

 

 

 

Changes in assets and liabilities, net of effects of acquisitions and divestitures

 

(7,182

)

(3,791

)

(3,709

)

11,762

 

Deferred income taxes

 

11,710

 

1,062

 

11,246

 

2,373

 

Stock-based compensation

 

(191

)

(354

)

(702

)

(1,376

)

Excess tax benefit on the exercise of stock options

 

(145

)

(8

)

 

103

 

Provision (benefit) for income taxes

 

(12,069

)

456

 

(7,849

)

1,746

 

Interest expense, net

 

9,683

 

9,658

 

37,127

 

41,505

 

Preferred stock dividend

 

 

 

 

(1,038

)

Depletion of landfill operating lease obligations

 

(1,478

)

(1,195

)

(7,021

)

(6,010

)

Income from assets under contractual obligation

 

190

 

142

 

190

 

1,605

 

Gain on sale of equipment

 

215

 

333

 

806

 

387

 

Other income, net

 

(220

)

(273

)

(571

)

(548

)

EBITDA

 

$

25,121

 

$

26,167

 

$

110,573

 

$

122,324

 

 



 

CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES

Unaudited

(In thousands)

 

Following is a reconciliation of Free Cash Flow to Net Cash Provided by Operating Activities:

 

 

 

Three Months Ended

 

Twelve Months Ended

 

 

 

April 30,

 

April 30,

 

April 30,

 

April 30,

 

 

 

2007

 

2008

 

2007

 

2008

 

 

 

 

 

 

 

 

 

 

 

EBITDA

 

$

25,121

 

$

26,167

 

$

110,573

 

$

122,324

 

 Add (deduct):

Cash interest

 

(14,491

)

(13,923

)

(34,307

)

(40,792

)

 

Capital expenditures

 

(24,464

)

(13,996

)

(100,845

)

(73,174

)

 

Cash taxes

 

(468

)

425

 

(2,708

)

(1,426

)

 

Depletion of landfill operating lease obligations

 

1,478

 

1,195

 

7,021

 

6,010

 

 

Change in working capital, adjusted for non-cash items

 

12,729

 

6,178

 

1,648

 

(7,605

)

 

 

 

 

 

 

 

 

 

 

FREE CASH FLOW

 

(95

)

6,046

 

(18,618

)

5,337

 

 

 

 

 

 

 

 

 

 

 

Add (deduct):

Capital expenditures

 

24,464

 

13,996

 

100,845

 

73,174

 

 

Other

 

239

 

95

 

(1,171

)

(6,696

)

Net Cash Provided by Operating Activities

 

$

24,608

 

$

20,137

 

$

81,056

 

$

71,815

 

 



 

CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES

SUPPLEMENTAL DATA TABLES

(Unaudited)

(In thousands)

 

Amounts of the Company’s total revenues attributable to services provided are as follows:

 

 

 

Three Months Ended
April 30,

 

Twelve Months Ended
April 30,

 

 

 

2007

 

2008

 

2007

 

2008

 

Collection

 

$

59,350

 

$

63,232

 

$

258,334

 

$

266,214

 

Landfill / disposal facilities

 

23,875

 

24,087

 

106,465

 

106,234

 

Transfer

 

4,786

 

5,913

 

23,559

 

26,556

 

Recycling

 

38,704

 

46,396

 

142,967

 

180,513

 

Total revenues

 

$

126,715

 

$

139,628

 

$

531,325

 

$

579,517

 

 

Components of revenue growth for the three months ended April 30, 2008 compared to the three months ended April 30, 2007:

 

 

 

Percentage

 

Solid Waste Operations (1)

Price

 

1.7

%

 

Volume

 

3.3

%

 

Commodity price and volume

 

0.6

%

Total growth - Solid Waste Operations

 

5.6

%

 

 

 

 

FCR Operations (1)

Price

 

8.2

%

 

Volume

 

13.6

%

Total growth - FCR Operations

 

21.8

%

 

 

 

 

Rollover effect of acquisitions (2)

 

1.0

%

 

 

 

 

Total revenue growth (2)

 

10.2

%

 


(1) - Calculated as a percentage of segment revenues.

(2) - Calculated as a percentage of total revenues.

 

Solid Waste Internalization Rates by Region:

 

 

 

Three Months Ended
April 30,

 

Twelve Months Ended
April 30,

 

 

 

2007 (1)

 

2008

 

2007 (1)

 

2008

 

North Eastern region

 

57.8

%

64.4

%

56.5

%

60.8

%

South Eastern region

 

30.0

%

50.5

%

29.2

%

33.5

%

Central region

 

78.5

%

77.5

%

77.7

%

78.9

%

Western region

 

58.1

%

62.3

%

56.8

%

61.3

%

Solid Waste internalization

 

59.9

%

65.2

%

58.6

%

61.6

%

 


(1)  Internalization rates for the three and twelve months ended April 30, 2007 have been revised to exclude the activity associated with the Buffalo Hauling and Buffalo Transfer as well as MTS Environmental .  The Company divested the Buffalo operations during the quarter ended October 31, 2007.  The Company terminated operations at MTS Environmental during the quarter ended April 30, 2008.

 



 

US GreenFiber (50% owned) Financial Statistics:

 

 

 

Three Months Ended
April 30,

 

Twelve Months Ended
April 30,

 

 

 

2007

 

2008

 

2007

 

2008

 

Revenues

 

$

40,758

 

$

31,709

 

$

186,284

 

$

151,635

 

Net (loss) income

 

(1,191

)

(2,551

)

4,227

 

(8,103

)

Cash flow from operations

 

1,435

 

2,834

 

14,511

 

10,178

 

Net working capital changes

 

(348

)

2,503

 

(406

)

6,597

 

EBITDA

 

$

1,783

 

$

331

 

$

14,917

 

$

3,581

 

 

 

 

 

 

 

 

 

 

 

As a percentage of revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income

 

-2.9

%

-8.0

%

2.3

%

-5.3

%

EBITDA

 

4.4

%

1.0

%

8.0

%

2.4

%

 

Components of Growth versus Maintenance Capital Expenditures (1):

 

 

 

Three Months Ended
April 30,

 

Twelve Months Ended
April 30,

 

 

 

2007

 

2008

 

2007

 

2008

 

Growth Capital Expenditures:

 

 

 

 

 

 

 

 

 

Landfill Development

 

$

8,084

 

$

1,271

 

$

22,849

 

$

11,896

 

MRF Equipment Upgrades

 

1,971

 

3,282

 

8,209

 

4,053

 

Other

 

1,537

 

117

 

5,680

 

3,001

 

Total Growth Capital Expenditures

 

11,592

 

4,670

 

36,738

 

18,950

 

 

 

 

 

 

 

 

 

 

 

Maintenance Capital Expenditures:

 

 

 

 

 

 

 

 

 

Vehicles, Machinery / Equipment and Containers

 

5,291

 

2,809

 

26,189

 

12,326

 

Landfill Construction & Equipment

 

5,649

 

4,385

 

32,500

 

30,126

 

Facilities

 

1,577

 

1,485

 

4,134

 

9,783

 

Other

 

355

 

647

 

1,284

 

1,989

 

Total Maintenance Capital Expenditures

 

12,872

 

9,326

 

64,107

 

54,224

 

 

 

 

 

 

 

 

 

 

 

Total Capital Expenditures

 

$

24,464

 

$

13,996

 

$

100,845

 

$

73,174

 

 


(1) The Company’s 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, 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.  Growth capital expenditures also include those outlays associated with acquiring landfill operating leases, which do not meet the operating lease payment definition, but which were included as a commitment in the successful bid.  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.