RUTLAND, Vt., Sept. 7 /PRNewswire-FirstCall/ -- Casella Waste
Systems, Inc. (NASDAQ:CWST), a regional, non-hazardous solid waste
services company, today reported financial results for the first
quarter of its 2006 fiscal year. First Quarter Results For the
quarter ended July 31, 2005, the company reported revenues of
$132.0 million. The company's net income per common share was
$0.09. Operating income for the quarter was $13.1 million. Cash
provided by operating activities in the quarter was $22.6 million.
The company's earnings before interest, taxes, depreciation and
amortization (EBITDA) was $29.2 million*. As of July 31, 2005, the
company had cash on hand of $6.8 million, and had an outstanding
total debt level of $386.5 million. Highlights of the Quarter "Our
most significant accomplishment in the first quarter was the 14-0
vote of the Chemung County Legislature to enter into an operating
agreement with the company for the operation of the county's
Subtitle D landfill," John W. Casella, chairman and chief executive
officer, said. "Once again, we've been able to apply our unique
public/private partnership model to the successful development of
disposal capacity, one of our highest ongoing strategic priorities.
"Our EBITDA* numbers were impacted in the areas of fuel and
third-party transportation as volumes increased at our disposal
facilities," Casella said. "Our Central region saw its tonnages
impacted by the disruption of business resulting from a fire at our
Glens Falls-area transfer station, which was not able to accept any
waste for several weeks while it underwent repairs," Casella said.
"We were also impacted by expenses surrounding the successful
effort to defend our permit at our Wellsboro, Penn. transfer
station. The impact from these two events was approximately
$825,000, or 2 cents per share." We also saw increased costs from
Sarbannes-Oxley requirements on a year- over-year basis," Casella
said. "On the positive side, we saw healthy price and volume growth
both in our solid waste and recycling operations, and realized a
nearly one hundred basis point reduction in labor costs as a
percent of revenue, the result of our successful efforts in
continuous improvement," Casella said. Company Reaffirms Fiscal
Year 2006 Guidance The company reaffirmed that it believes its
results for fiscal year 2006 will be in the following ranges: --
Revenues between $500.0 million and $520.0 million; -- EBITDA
between $112.0 million and $116.0 million; -- Non-growth
maintenance capital expenditures between $57.0 million and $61.0
million; facility capital expenditures of $6.0 million; and
landfill development capital expenditures of $32.0 million (in
conjunction with the addition of 52 million tons of total
company-wide disposal capacity since year-end 2003), for a total of
expected capital expenditures between $95.0 million and $99.0
million; and -- Free cash flow between $(13.0) million and $(9.0)
million. *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
(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 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 expenditure and working capital requirements. For
these reasons we utilize these non-GAAP metrics to measure our
performance at all levels. These measures do not represent, and
should not be considered as alternatives to cash provided by
operating activities as determined in accordance with GAAP.
Moreover, these measures do not necessarily indicate whether cash
flow will be sufficient for such items as working capital 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. More
detailed financial results are contained in the tables accompanying
this release. Casella Waste Systems, headquartered in Rutland,
Vermont, provides collection, transfer, disposal and recycling
services primarily in the northeastern United States. For further
information, contact Richard Norris, chief financial officer; or
Joseph Fusco, vice president; 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, September
8, 2005 at 10:00 a.m. ET. Individuals interested in participating
in the call should dial (913) 981-5571 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 by calling
719-457-0820 (conference code #9089324) before 11:59 p.m. ET,
Thursday, September 15, 2005, or by visiting the company's website.
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,"
"anticipates," "expects" or words of similar import. Similarly,
statements that describe the Company's future plans, objectives or
goals are forward- looking statements. 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 make
acquisitions and otherwise develop additional disposal capacity;
continuing weakness in general economic conditions may affect our
revenues; increasing fuel costs may affect our cost of operations;
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. Other factors which could materially affect
such forward-looking statements can be found in our periodic
reports filed with the Securities and Exchange Commission,
including certain factors which could affect future operating
results detailed in the Management's Discussion and Analysis
section in our Form 10-K for the fiscal year ended April 30, 2005.
(tables follow) CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS Unaudited (In thousands,
except amounts per share) Three Months Ended July 31, July 31, 2004
2005 Revenues $123,672 $132,000 Operating expenses: Cost of
operations 78,277 85,587 General and administration 15,515 17,218
Depreciation and amortization 17,223 16,134 111,015 118,939
Operating income 12,657 13,061 Other expense/(income), net:
Interest expense, net 7,088 7,350 Loss from equity method
investments 68 70 Other expense 530 51 7,686 7,471 Income from
continuing operations before income taxes and discontinued
operations 4,971 5,590 Provision for income taxes 2,209 2,483
Income from continuing operations before discontinued operations
2,762 3,107 Income from discontinued operations, net of income
taxes (1) 81 -- Net income 2,843 3,107 Preferred stock dividend 838
850 Net income available to common stockholders $2,005 $2,257
Common stock and common stock equivalent shares outstanding,
assuming full dilution 25,092 25,218 Net income per common share
before discontinued operations $0.08 $0.09 Net income per common
share $0.08 $0.09 EBITDA (2) $29,880 $29,195 CASELLA WASTE SYSTEMS,
INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS
Unaudited (In thousands) April 30, July 31, ASSETS 2005 2005
CURRENT ASSETS: Cash and cash equivalents $8,578 $6,773 Restricted
cash 70 71 Accounts receivable -- trade, net of allowance for
doubtful accounts 51,726 56,642 Other current assets 9,009 8,447
Total current assets 69,383 71,933 Property, plant and equipment,
net of accumulated depreciation 412,753 431,515 Goodwill 157,492
158,264 Intangible assets, net 2,711 2,436 Restricted cash 12,124
12,175 Investments in unconsolidated entities 37,699 36,928 Other
non-current assets 20,292 16,605 $712,454 $729,856 LIABILITIES AND
STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Current maturities of
long-term debt $281 $315 Current maturities of capital lease
obligations 632 643 Accounts payable 46,107 48,104 Other accrued
liabilities 45,734 45,427 Total current liabilities 92,754 94,489
Long-term debt, less current maturities 378,436 389,580 Capital
lease obligations, less current maturities 1,475 1,310 Other
long-term liabilities 33,043 34,508 Series A redeemable,
convertible preferred stock 67,964 68,814 Stockholders' equity
138,782 141,155 $712,454 $729,856 CASELLA WASTE SYSTEMS, INC. AND
SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited (In thousands) Three Months Ended July 31, July 31, 2004
2005 Cash Flows from Operating Activities: Net income $2,843 $3,107
Adjustments to reconcile net income to net cash provided by
operating activities -- Depreciation and amortization 17,223 16,134
Depletion of landfill operating lease obligations 1,347 1,428 Loss
from equity method investment 68 70 Loss on sale of equipment 276
99 Deferred income taxes 1,755 1,721 Changes in assets and
liabilities, net of effects of acquisitions and divestitures
(3,799) 62 16,870 19,514 Net Cash Provided by Operating Activities
19,713 22,621 Cash Flows from Investing Activities: Acquisitions,
net of cash acquired (3,582) (1,044) Additions to property, plant
and equipment -- Growth (5,309) (14,941) -- Maintenance (17,599)
(19,675) Payments on landfill operating lease contracts (9,363)
(428) Other 767 638 Net Cash Used In Investing Activities (35,086)
(35,450) Cash Flows from Financing Activities: Proceeds from
long-term borrowings 44,850 35,955 Principal payments on long-term
debt (34,306) (24,931) Proceeds from exercise of stock options 240
-- Net Cash Provided by Financing Activities 10,784 11,024 Net
decrease in cash and cash equivalents (4,589) (1,805) Cash and cash
equivalents, beginning of period 8,007 8,578 Cash and cash
equivalents, end of period $3,418 $6,773 CASELLA WASTE SYSTEMS,
INC. AND SUBSIDIARIES Unaudited (In thousands) Note 1: The company
divested the assets of Data Destruction Services, Inc. (Data
Destruction) during the quarter ended October 31, 2004. The
transaction required discontinued operations treatment under SFAS
No. 144, therefore the operating results of Data Destruction have
been reclassified from continuing to discontinued operations for
the quarter ended July 31, 2004. Note 2: Non-GAAP Financial
Measures In addition to disclosing financial results prepared in
accordance with Generally Accepted Accounting Principles (GAAP), we
also disclose EBITDA (earnings before interest, taxes, depreciation
and amortization, deferred costs and impairment charge) 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 expenditure and working capital requirements. For these
reasons, we utilize these non-GAAP metrics to measure our
performance at all levels. These measures do not represent, and
should not be considered as alternatives to cash provided by
operating activities as determined in accordance with GAAP.
Moreover, these measures do not necessarily indicate whether cash
flow will be sufficient for such items as working capital 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 Cash Provided by Operating
Activities: Three Months Ended July 31, July 31, 2004 2005 Cash
Provided by Operating Activities $19,713 $22,621 Changes in assets
and liabilities, net of effects of acquisitions and divestitures
3,799 (62) Deferred income taxes (1,755) (1,721) Provision for
income taxes 2,209 2,483 Interest expense, net 7,088 7,350
Depletion of landfill operating lease obligations (1,347) (1,428)
Other income (expense), net 173 (48) EBITDA $29,880 $29,195
Following is a reconciliation of Free Cash Flow to Cash Provided by
Operating Activities: Twelve Months Ended April 30, 2005 EBITDA
$29,195 Add (deduct): Cash interest (276) Capital expenditures
(34,616) Cash taxes (528) Depletion of landfill operating lease
obligations 1,428 Change in working capital, adjusted for non-cash
items (6,795) FREE CASH FLOW $(11,592) Add (deduct): Capital
expenditures 34,616 Other (403) Cash Provided by Operating
Activities $22,621 CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES
SUPPLEMENTAL DATA TABLES (Unaudited) (In thousands) Amounts of the
Company's total revenue attributable to services provided are as
follows: Three Months Ended July 31, 2004 2005 Collection $61,690
$65,267 Landfill / disposal facilities 20,434 23,263 Transfer
11,596 11,649 Recycling 29,952 31,821 Total revenues $123,672
$132,000 Components of revenue growth for the three months ended
July 31, 2005 compared to the three months ended July 31, 2004:
Percentage Solid Waste Operations (1) Price 4.4% Volume 1.0% Solid
waste commodity price and volume -0.2% Total growth -- Solid Waste
Operations 5.2% FCR Operations (1) Price 1.4% Volume 3.2% Total
growth -- Recycling Operations 4.6% Rollover effect of acquisitions
(as a percentage of total revenue) 1.5% Total revenue growth 6.7%
(1) -- Calculated as a percentage of segment revenues. Solid Waste
Internalization Rates by Region: Three Months Ended July 31, 2004
2005 North Eastern region 59.4% 60.5% South Eastern region 51.8%
51.9% Central region 80.6% 78.2% Western region 35.0% 41.2% Solid
waste operations 54.7% 56.9% US GreenFiber Financial Statistics:
Three Months Ended July 31, 2004 2005 Revenue $28,236 $31,599 Net
loss (137) (140) Cash flow from operations 1,420 (1,867) Net
working capital changes 182 (3,483) EBITDA $1,238 $1,616 As a
percentage of revenue: Net income -0.5% -0.4% EBITDA 4.4% 5.1%
DATASOURCE: Casella Waste Systems, Inc. CONTACT: Joseph Fusco, Vice
President of Casella Waste Systems, Inc., +1-802-775-0325 Web site:
http://www.casella.com/
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