SOURCE: Casella Waste Systems, Inc.

Casella Waste Systems, Inc.

December 03, 2012 17:40 ET

Casella Waste Systems, Inc. Announces Second Quarter Fiscal Year 2013 Results; Updates Guidance for Its Fiscal Year

RUTLAND, VT--(Marketwire - Dec 3, 2012) - Casella Waste Systems, Inc. (NASDAQ: CWST), a regional solid waste, recycling and resource management services company, today reported financial results for its second quarter fiscal year 2013, and provided updated guidance for its 2013 fiscal year. 

For the quarter ended October 31, 2012, revenues were $120.3 million, down $9.6 million or 7.3 percent from the same quarter last year, with revenue declines mainly driven by lower recycling commodity prices, lower landfill disposal volumes, and lower roll-off price and volumes. 

The company's net loss attributable to common shareholders was ($21.0) million, or ($0.68) per common share for the quarter, compared to net loss of ($0.8) million, or ($0.03) per share for the same quarter last year. The current quarter includes a $1.8 million severance and reorganization charge related to the August realignment, a $0.1 million expense related to the sale of the Maine Energy Recovery Company facility ("Maine Energy"), a $3.9 million loss on derivative instruments, and a $9.7 million loss on debt extinguishment related to the repurchase of the company's second lien notes in October. The quarter ended October 31, 2011 included a $0.4 million legal settlement charge, a $0.1 million development project charge, and a $0.1 million gain on disposal of discontinued operations net of taxes.

Excluding the unusual and one-time charges from each period and assuming no tax impact, the company's net loss attributable to common shareholders was ($5.7) million, or ($0.18) per common share for the quarter, compared to net loss of ($0.2) million, or ($0.01) per share for the same quarter last year.

Operating income was $4.4 million for the quarter, down $7.2 million from the same quarter last year. Excluding the unusual and one-time charges from each period, Adjusted Operating Income* in the current quarter was $6.2 million, down $5.9 million from the same quarter last year. Adjusted EBITDA* was $24.4 million for the quarter, down $6.1 million from same quarter last year.

"The northeastern U.S. economy remained a difficult environment through our second quarter," said John W. Casella, chairman and CEO of Casella Waste Systems. "Recycling commodity prices, landfill volumes at our Western New York landfills, and our roll-off collection line-of-business all underperformed our expectations in the quarter and, as such, we have lowered our guidance for the current fiscal year."

"We believe that broad uncertainty in the national and global economy has translated to declining economic activity across our region over the last 6 months," Casella said. "This trend was especially pronounced in the construction and demolition (C&D) market, where we experienced an unexpected 12.9 percent decline in roll-off revenues year-over-year on lower volumes, weak pricing, and a tough comparison to the second quarter last year when we saw increased demand from Hurricane Irene and Tropical Storm Lee clean-up activity. Despite this weakness, our pricing programs in the commercial and residential lines-of-business remained on track with positive 1.9 percent pricing in the quarter."

"Recycling commodity prices hit bottom in September and began to rebound modestly in October and November as Chinese and domestic demand reemerged," Casella said. "We have taken what we believe is a conservative view on recycling commodity prices for the remainder of our fiscal year with pricing expected to remain consistent with current levels. Maximizing our landfill capacity utilization in Western New York remains a challenge given the depressed volumes of C&D, special waste and residual streams from Marcellus Shale drilling activity. 

"We accomplished two important strategic goals in the quarter which we believe position the company well for the future, specifically:

  • "As separately announced this afternoon, we have completed the sale of the property containing our Maine Energy facility to the City of Biddeford, Maine. We expect to permanently close Maine Energy during our third quarter fiscal 2013 at which time we will dismantle the facility and begin transferring the municipal solid waste that was routed to Maine Energy to other disposal facilities that we own or operate. We expect the sale of Maine Energy to improve our financial results on a full year basis from fiscal year 2012, with consolidated Adjusted EBITDA margins expected to improve by roughly 70 basis points, operating income expected to improve by $7.9 million and cash flows expected to increase by roughly $5.6 million per year." 

  • "During the second quarter we redeemed our 11.0 percent $180.0 million second lien notes due July 2014 with the proceeds from a $46.0 million common stock offering, a $125.0 million add-on to our existing 7.75 percent senior subordinated notes due February 2019, and borrowings from our senior secured revolving credit facility. This set of transactions improved our credit metrics by lowering leverage, reduced our cash interest expense by roughly $9.0 million per year, and gives us over 3 years before our next major debt maturity." 

Fiscal 2013 Outlook
Due primarily to the negative impact of lower than expected recycling commodity prices and landfill volumes, softness in the roll-off line-of-business, and project and contract delays discussed below, the company adjusted its fiscal year guidance in the following categories:

  • Revenues between $468.0 million and $478.0 million.

  • Adjusted EBITDA* between $96.0 million and $100.0 million.

The negative variances from our fiscal year forecast as presented in August to this current forecast include the following impacts from the second quarter and our expectations about the remainder of the fiscal year:

  • While we expected average recycling commodity price per ton to decline through our second quarter, actual commodity prices declined below the levels we had forecasted in August. Given the actual lower results from our second quarter and our current revised commodity price forecast for the remainder of our fiscal year, we expect recycling Adjusted EBITDA to be approximately $1.3 million lower than that reflected in our August fiscal year forecast.

  • While we expected disposal volumes to decline through our second quarter, actual volumes and pricing declined below the levels we had forecasted in August, mainly due to lower C&D volumes, lower special waste volumes, and contract delays for drilling solidification work at our Western New York landfills. Given the actual lower results from our second quarter and our current revised forecast for the remainder of our fiscal year, we expect disposal Adjusted EBITDA to be approximately $2.8 million lower than that reflected in our August fiscal year forecast.

  • The roll-off collection line-of-business underperformed our August forecast projections with weaker than expected net revenue due to lower pricing and volumes. Given the actual lower results from our second quarter and our current revised forecast for the remainder of our fiscal year, we expect roll-off Adjusted EBITDA to be approximately $1.1 million lower than that reflected in our August fiscal year forecast.

  • The delayed start-up of the company's joint venture water treatment facility at its McKean landfill is expected reduce the facility's forecasted Adjusted EBITDA for the fiscal year by $0.7 million from the August fiscal year forecast.

*Non-GAAP Financial Measures
In addition to disclosing financial results prepared in accordance with Generally Accepted Accounting Principles in the United States (GAAP), the company also discloses 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-offs, legal settlement charges, bargain purchase gains, asset impairment charges, environmental remediation charges, severance and reorganization charges, as well as expenses from divestiture and financing costs (Adjusted EBITDA) which is a non-GAAP measure. The company also discloses earnings before interest, taxes, adjusted for gain on sale of assets, development project charge write-off, legal settlement charges, bargain purchase gains, asset impairment charges, environmental remediation charges, as well as severance and reorganization charges (Adjusted Operating Income) which is a non-GAAP measure. The company also discloses Free Cash Flow, which is defined as net cash provided by operating activities, less capital expenditures attributable to growth and maintenance (excluding acquisition related capital), less payments on landfill operating leases, less assets acquired through financing leases, plus proceeds from the sale of property and equipment, plus contributions from non-controlling interest holder, which is a non-GAAP measure. Adjusted EBITDA and Adjusted Operating Income are reconciled to net income (loss), while Free Cash Flow is reconciled to net cash provided by operating activities.

The company presents Adjusted EBITDA, Adjusted Operating Income, 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, Adjusted Operating Income, 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, Adjusted Operating Income, 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, Adjusted Operating Income, or Free Cash Flow presented by other companies.

About Casella Waste Systems, Inc.
Casella Waste Systems, Inc., headquartered in Rutland, Vermont, provides solid waste management services consisting of collection, transfer, disposal, and recycling services in the northeastern United States. For further information, investors contact Ned Coletta, vice president of finance and investor relations at (802) 772-2239, media contact Joseph Fusco, vice president at (802) 772-2247, or visit the company's website at http://www.casella.com.

Conference call to discuss quarter
The company will host a conference call to discuss these results on Tuesday, December 4, 2012 at 10:00 a.m. ET. Individuals interested in participating in the call should dial (877) 548-9590 or for international participants (720) 545-0037 at least 10 minutes before start time. The call will also be webcast; to listen, participants should visit Casella Waste Systems' website at http://ir.casella.com and follow the appropriate link to the webcast. A replay of the call will be available on the company's website, or by calling (855) 859-2056 or (404) 537-3406 (Conference ID 70181048) until 11:59 p.m. ET on Tuesday, December 11, 2012. 

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 energy pricing or the commodity pricing of our recyclables may make it more difficult for us to predict our results of operations or meet our estimates; we may incur environmental charges or asset impairments in the future; and we may be unable to decommission our waste-to-energy facility on a timely basis and shift waste volumes to other landfill sites. 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, 2012.

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  
(Unaudited)  
(In thousands, except amounts per share)  
                         
    Three Months Ended     Six Months Ended  
    October 31,     October 31,     October 31,     October 31,  
    2012     2011     2012     2011  
                                 
Revenues   $ 120,335     $ 129,866     $ 241,529     $ 257,059  
                                 
Operating expenses:                                
  Cost of operations     85,474       86,627       170,251       171,851  
  General and administration     13,985       16,062       29,307       32,268  
  Depreciation and amortization     14,632       15,061       29,388       29,567  
  Severance and reorganization costs     1,793       -       1,827       -  
  Expense from divestiture and financing costs     77       -       631       -  
  Legal settlement     -       359       -       1,359  
  Development project charge     -       131       -       131  
      115,961       118,240       231,404       235,176  
                                 
Operating income     4,374       11,626       10,125       21,883  
                                 
Other expense/(income), net:                                
  Interest expense, net     11,689       11,207       23,533       22,357  
  Loss from equity method investment     109       1,523       1,875       3,781  
  Loss on derivative instruments     3,896       -       3,896       -  
  Loss on debt extinguishment     9,670       -       9,670       -  
  Other income     (311 )     (327 )     (441 )     (432 )
      25,053       12,403       38,533       25,706  
                                 
                                 
Loss from continuing operations before income taxes and discontinued operations     (20,679 )     (777 )     (28,408 )     (3,823 )
Provision for income taxes     413       67       1,063       728  
                                 
Loss from continuing operations before discontinued operations     (21,092 )     (844 )     (29,471 )     (4,551 )
                                 
Discontinued operations:                                
  Gain on disposal of discontinued operations, net of income taxes (1)     -       79       -       725  
                                 
Net loss     (21,092 )     (765 )     (29,471 )     (3,826 )
                                 
  Less: Net loss attributable to noncontrolling interest     (125 )     -       (133 )     -  
                                 
Net loss attributable to common stockholders   $ (20,967 )   $ (765 )   $ (29,338 )   $ (3,826 )
                                 
Weighted average common shares outstanding     30,872       26,759       28,932       26,661  
                                 
Net loss per common share   $ (0.68 )   $ (0.03 )   $ (1.01 )   $ (0.14 )
                                 
Adjusted EBITDA (2)   $ 24,392     $ 30,532     $ 48,708     $ 59,194  
         
         
CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
         
    October 31,   April 30,
ASSETS   2012   2012
             
CURRENT ASSETS:            
  Cash and cash equivalents   $ 1,901   $ 4,534
  Restricted cash     23,655     76
  Accounts receivable - trade, net of allowance for doubtful accounts     50,978     47,472
  Other current assets     17,495     15,274
Total current assets     94,029     67,356
             
Property, plant and equipment, net of accumulated depreciation and amortization     424,839     416,717
Goodwill     102,722     101,706
Intangible assets, net     4,217     2,970
Restricted assets     521     424
Notes receivable - related party/employee     514     722
Investments in unconsolidated entities     20,729     22,781
Other non-current assets     21,904     21,067
             
Total assets   $ 669,475   $ 633,743
             
LIABILITIES AND STOCKHOLDERS' EQUITY            
             
CURRENT LIABILITIES:            
  Current maturities of long-term debt and capital leases   $ 73,795   $ 1,228
  Current maturities of financing lease obligations     349     338
  Accounts payable     51,326     46,709
  Other accrued liabilities     42,904     40,060
Total current liabilities     168,374     88,335
             
Long-term debt and capital leases, less current maturities     412,051     473,381
Financing lease obligations, less current maturities     1,640     1,818
Other long-term liabilities     52,345     51,978
             
Total stockholders' equity     35,065     18,231
             
Total liabilities and stockholders' equity   $ 669,475   $ 633,743
             
             
CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES  
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  
(Unaudited)  
(In thousands)  
             
    Six Months Ended  
    October 31,     October 31,  
    2012     2011  
Cash Flows from Operating Activities:                
Net loss   $ (29,471 )   $ (3,826 )
Gain on disposal of discontinued operations, net     -       (725 )
Adjustments to reconcile net loss to net cash provided by operating activities -                
  Gain on sale of property and equipment     (223 )     (754 )
  Depreciation and amortization     29,388       29,567  
  Depletion of landfill operating lease obligations     4,878       4,514  
  Interest accretion on landfill and environmental remediation liabilities     1,858       1,740  
  Development project charge     -       131  
  Amortization of discount on second lien notes and senior subordinated notes     502       467  
  Loss from equity method investments     1,875       3,781  
  Loss on derivative instruments     3,896       -  
  Loss on debt extinguishment     9,670       -  
  Stock-based compensation     1,306       1,366  
  Excess tax benefit on the vesting of share based awards     (188 )     (219 )
  Deferred income taxes     907       1,008  
  Changes in assets and liabilities, net of effects of acquisitions and divestitures     (2,023 )     4,428  
    Net Cash Provided by Operating Activities     22,375       41,478  
Cash Flows from Investing Activities:                
  Acquisitions, net of cash acquired     (4,635 )     (715 )
  Additions to property, plant and equipment                
    - acquisitions     (417 )     (133 )
      - growth     (8,257 )     (6,410 )
      - maintenance     (25,368 )     (29,427 )
  Payment for capital related to divestiture     (618 )     -  
  Payments on landfill operating lease contracts     (3,298 )     (3,314 )
  Proceeds from sale of property and equipment     557       1,170  
  Investments in unconsolidated entities     (1,000 )     (935 )
    Net Cash Used In Investing Activities     (43,036 )     (39,764 )
Cash Flows from Financing Activities:                
  Proceeds from long-term borrowings     236,177       82,100  
  Principal payments on long-term debt     (227,028 )     (82,146 )
  Change in restricted cash     (23,579 )     -  
  Payment of tender premium and costs on second lien notes     (6,745 )     -  
  Payments of financing costs     (4,329 )     (184 )
  Net proceeds from the sale of Class A common stock     42,149       -  
  Proceeds from the exercise of share based awards     -       176  
  Excess tax benefit on the vesting of share based awards     188       219  
  Contributions from noncontrolling interest holder     1,195       -  
    Net Cash Provided By Financing Activities     18,028       165  
    Net Cash Provided By Discontinued Operations     -       725  
Net (decrease) increase in cash and cash equivalents     (2,633 )     2,604  
Cash and cash equivalents, beginning of period     4,534       1,817  
Cash and cash equivalents, end of period   $ 1,901     $ 4,421  
Supplemental Disclosures:                
Cash interest   $ 22,578     $ 20,531  
Cash income taxes, net of refunds   $ 71     $ 5,281  
 
 
CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(In thousands)
 
Note 1: Divestiture and Discontinued Operations
 
Maine Energy Divestiture
  On August 1, 2012, we executed a purchase and sale agreement with the City of Biddeford, Maine pursuant to which we agreed to sell the real and personal property of Maine Energy, which resides in our Eastern region, to the City of Biddeford, subject to satisfaction of conditions precedent and closing. We agreed to sell Maine Energy for undiscounted purchase consideration of $6,650, which shall be paid in installments over the next 21 years, subject to the terms of the purchase and sale agreement. The transaction closed on November 30, 2012 and we waved certain conditions precedent not satisfied at that time. Post closing, we are entitled to continue operations of Maine Energy for our benefit and obligated to begin work to decommission the facility in accordance with the provisions of the agreement within a period not to exceed six months after the closing date. Following the decommissioning of Maine Energy, it is our responsibility to demolish the facility, at our cost, within twelve months of the closing date and in accordance with the terms of the purchase and sale agreement.
 
Discontinued Operations
  On January 23, 2011, we entered into a purchase and sale agreement and related agreements to sell non-integrated recycling assets and select intellectual property assets to a new company (the "Purchaser") formed by Pegasus Capital Advisors, L.P. and Intersection LLC for $130,400 in gross proceeds. Pursuant to these agreements, we divested non-integrated recycling assets located outside our core operating regions of New York, Massachusetts, Vermont, New Hampshire, Maine and northern Pennsylvania, including 17 material recovery facilities ("MRFs"), one transfer station and certain related intellectual property assets. Following the transaction, we retained four integrated MRFs located in our core operating regions. As a part of the disposition, we also entered into a ten-year commodities marketing agreement with the Purchaser to market 100% of the tonnage from three of our remaining integrated MRFs.
 
  We completed the transaction on March 1, 2011 for $134,195 in gross cash proceeds. This included an estimated $3,795 working capital and other purchase price adjustment, which was subject to further adjustment, as defined in the purchase and sale agreement. The final working capital adjustment, along with additional legal expenses related to the transaction, of $646 was recorded to gain on disposal of discontinued operations, net of income taxes in the first quarter of fiscal year 2012.
 
  In the three months ended October 31, 2011, we recorded an additional working capital adjustment of $79 to gain on disposal of discontinued operations, net of income taxes, which related to our subsequent collection of receivable balances that were released to us for collection by the Purchaser.
 
Note 2: Non - GAAP Financial Measures
 
  In addition to disclosing financial results prepared in accordance with Generally Accepted Accounting Principles in the United States (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-offs, legal settlement charges, bargain purchase gains, asset impairment charges, environmental remediation charges, severance and reorganization charges, as well as expenses from divestiture and financing costs (Adjusted EBITDA) which is a non-GAAP measure. We also disclose earnings before interest, taxes, adjusted for gain on sale of assets, development project charge write-offs, legal settlement charges, bargain purchase gains, asset impairment charges, environmental remediation charges, severance and reorganization charges, as well as expenses from divestiture and financing costs (Adjusted Operating Income) 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 attributable to growth and maintenance (excluding acquisition related capital), less payments on landfill operating leases, less assets acquired through financing leases, plus proceeds from the sale of property and equipment, plus contributions from non-controlling interest holder, which is a non-GAAP measure. Adjusted EBITDA and Adjusted Operating Income are reconciled to net income (loss), while Free Cash Flow is reconciled to net cash provided by operating activities.
 
  We present Adjusted EBITDA, Adjusted Operating Income, 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. We use 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, Adjusted Operating Income, and Free Cash Flow to investors, in addition to corresponding income statement and cash flow statement measures, affords investors the benefit of viewing our performance using the same financial metrics that our management team uses in making many key decisions and understanding how the core business and our 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. Adjusted EBITDA, Adjusted Operating Income, 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, Adjusted Operating Income, or Free Cash Flow presented by other companies.
 
                         
Following is a reconciliation of Adjusted EBITDA and Adjusted Operating Income to Net Loss:  
                         
    Three Months Ended     Six Months Ended  
    October 31,     October 31,     October 31,     October 31,  
    2012     2011     2012     2011  
                                 
Net Loss   $ (21,092 )   $ (765 )   $ (29,471 )   $ (3,826 )
  Gain on disposal of discontinued operations, net     -       (79 )     -       (725 )
  Provision for income taxes     413       67       1,063       728  
  Other expense, net     13,364       1,196       15,001       3,349  
  Interest expense, net     11,689       11,207       23,533       22,357  
  Legal settlement     -       359       -       1,359  
  Expense from divestiture and financing costs     77       -       631       -  
  Depreciation and amortization     14,632       15,061       29,388       29,567  
  Development project charge     -       131       -       131  
  Severance and reorganization charges     1,793       -       1,827       -  
  Depletion of landfill operating lease obligations     2,591       2,484       4,878       4,514  
  Interest accretion on landfill and environmental remediation liabilities     925       871       1,858       1,740  
Adjusted EBITDA (2)   $ 24,392     $ 30,532     $ 48,708     $ 59,194  
  Depreciation and amortization     (14,632 )     (15,061 )     (29,388 )     (29,567 )
  Depletion of landfill operating lease obligations     (2,591 )     (2,484 )     (4,878 )     (4,514 )
  Interest accretion on landfill and environmental remediation liabilities     (925 )     (871 )     (1,858 )     (1,740 )
Adjusted Operating Income (2)   $ 6,244     $ 12,116     $ 12,584     $ 23,373  
                                 
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,  
    2012     2011     2012     2011  
Net Cash Provided by Operating Activities   $ 14,854     $ 27,538     $ 22,375     $ 41,478  
Capital expenditures - growth and maintenance     (17,229 )     (20,969 )     (33,625 )     (35,837 )
Payments on landfill operating lease contracts     (1,484 )     (1,456 )     (3,298 )     (3,314 )
Proceeds from sale of property and equipment     292       971       557       1,170  
Contributions from noncontrolling interest holder     474       -       1,195       -  
Free Cash Flow (2)   $ (3,093 )   $ 6,084     $ (12,796 )   $ 3,497  
   
   
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, 2012 and 2011 are as follows:  
                     
    Three Months Ended October 31,  
    2012   % of Total Revenue     2011   % of Total Revenue  
Collection   $ 53,104   44.1 %   $ 54,764   42.2 %
Disposal     32,382   26.9 %     34,254   26.4 %
Power generation     2,793   2.3 %     3,190   2.4 %
Processing and organics     13,795   11.5 %     13,992   10.8 %
  Solid waste operations     102,074   84.8 %     106,200   81.8 %
Major accounts     9,221   7.7 %     9,847   7.6 %
Recycling     9,040   7.5 %     13,819   10.6 %
Total revenues   $ 120,335   100.0 %   $ 129,866   100.0 %
                         
    Six Months Ended October 31,  
    2012   % of Total Revenue     2011   % of Total Revenue  
Collection   $ 106,147   43.9 %   $ 108,390   42.2 %
Disposal     63,349   26.2 %     66,426   25.8 %
Power generation     5,456   2.3 %     6,233   2.4 %
Processing and organics     28,427   11.8 %     28,730   11.2 %
  Solid waste operations     203,379   84.2 %     209,779   81.6 %
Major accounts     18,746   7.8 %     20,557   8.0 %
Recycling     19,404   8.0 %     26,723   10.4 %
Total revenues   $ 241,529   100.0 %   $ 257,059   100.0 %
                         
                         
Components of revenue growth for the three months ended October 31, 2012 compared to the three months ended October 31, 2011 are as follows:  
   
    Amount     % of Related Business     % of Solid Waste Operations     % of Total Company  
Solid Waste Operations:                          
Collection   $ (74 )   -0.1 %   -0.1 %   -0.1 %
Disposal     (184 )   -0.5 %   -0.2 %   -0.1 %
Solid Waste Yield     (258 )         -0.3 %   -0.2 %
                           
Collection     (2,379 )         -2.2 %   -1.8 %
Disposal     (1,259 )         -1.2 %   -1.0 %
Organics and processing     140           0.1 %   0.1 %
Solid Waste Volume     (3,498 )         -3.3 %   -2.7 %
                           
Fuel surcharge     (67 )         -0.1 %   0.0 %
Commodity price & volume     (849 )         -0.8 %   -0.6 %
Acquisitions     1,029           1.0 %   0.8 %
Closed landfill     (482 )         -0.5 %   -0.4 %
Total Solid Waste     (4,126 )         -4.0 %   -3.1 %
                           
Major Accounts     (626 )               -0.5 %
                           
Recycling Operations:               % of Recycling Operations        
Commodity price     (4,905 )         -35.5 %   -3.8 %
Commodity volume     126           0.9 %   0.1 %
Total Recycling     (4,779 )         -34.6 %   -3.7 %
                           
Total Company   $ (9,531 )               -7.3 %
                           
Solid Waste Internalization Rates by Region:              
                         
    Three Months Ended October 31,     Six Months Ended October 31,  
    2012     2011     2012     2011  
Eastern region   53.5 %   59.7 %   53.7 %   56.9 %
Western region   74.2 %   77.0 %   73.4 %   76.6 %
Solid waste internalization   65.0 %   68.9 %   64.5 %   67.3 %
                         
   
CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES  
SUPPLEMENTAL DATA TABLES  
(Unaudited)  
(In thousands)  
                         
GreenFiber Financial Statistics (1):             
                         
    Three Months Ended October 31,     Six Months Ended October 31,  
    2012     2011     2012     2011  
Revenues   $ 19,494     $ 21,841     $ 32,595     $ 37,856  
Net loss     (297 )     (3,049 )     (3,866 )     (7,564 )
Cash flow provided by (used in) operations     805       (949 )     1,031       (2,258 )
Net working capital changes     (662 )     (149 )     1,274       726  
Adjusted EBITDA   $ 1,467     $ (800 )   $ (243 )   $ (2,984 )
                                 
As a percentage of revenues:                                
                                 
Net loss     -1.5 %     -14.0 %     -11.9 %     -20.0 %
Adjusted EBITDA     7.5 %     -3.7 %     -0.7 %     -7.9 %
                                 
(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 October 31,     Six Months Ended October 31,  
    2012     2011     2012     2011  
Growth capital expenditures:                                
Landfill development   $ 257     $ 203     $ 589     $ 244  
Water treatment facility     3,908       -       4,668       -  
Transfer station construction     1,434       -       1,434          
Landfill gas-to-energy project     -       792       -       1,159  
MRF equipment upgrades     -       2,498       -       3,007  
Other     656       1,774       1,566       2,000  
Total Growth Capital Expenditures     6,255       5,267       8,257       6,410  
                                 
Maintenance capital expenditures:                                
Vehicles, machinery / equipment and containers   $ 3,168     $ 3,868     $ 6,221     $ 10,308  
Landfill construction & equipment     7,172       9,807       18,094       16,804  
Facilities     501       1,815       780       1,990  
Other     133       212       273       325  
Total Maintenance Capital Expenditures     10,974       15,702       25,368       29,427  
                                 
Total Growth and Maintenance Capital Expenditures   $ 17,229     $ 20,969     $ 33,625     $ 35,837  
                                 
(1) Our capital expenditures are broadly defined as pertaining to either growth, maintenance or acquisition activities. Growth capital expenditures are defined as costs related to development of new airspace, permit expansions, and new recycling contracts along with incremental costs of equipment and infrastructure added to further such activities. Growth capital expenditures include the cost of equipment added directly as a result of organic business growth as well as expenditures associated with 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. Acquisition capital expenditures are defined as costs of equipment added directly as a result of new business growth related to an acquisition.  

Contact Information

  • Investors:
    Ned Coletta
    Vice President of Finance and Investor Relations
    (802) 772-2239

    Media:
    Joseph Fusco
    Vice President
    (802) 772-2247

    http://www.casella.com