RUTLAND, Vt., Dec. 6 /PRNewswire-FirstCall/ -- Casella Waste
Systems, Inc. (NASDAQ:CWST), a regional, non-hazardous solid waste
services company, today reported financial results for the second
quarter and first six months of its 2007 fiscal year. Second
Quarter Results For the quarter ended October 31, 2006, the company
reported revenues of $147.8 million, up $11.0 million, or 8.0
percent over the same quarter last year. The company's net income
per common share was $0.06, compared to $0.13 per share in the same
quarter last year. Operating income for the quarter was $14.6
million, up $0.8 million or 5.8 percent over the same quarter last
year. Cash provided by operating activities in the quarter was
$21.0 million, up $7.0 million, or 50.0 percent compared to the
same quarter last year. The company's earnings before interest,
taxes, depreciation and amortization (EBITDA) were $33.9 million*,
up $3.2 million, or 10.4 percent from the same quarter last year
and an increase of $7.3 million from the first quarter of fiscal
year 2007. For the six months ended October 31, 2006, the company
reported revenues of $291.3 million. The company's net income per
common share was $0.02. Operating income for the six month period
was $23.3 million. Cash provided by operating activities for the
period was $39.4 million. The company's earnings before interest,
taxes, depreciation and amortization (EBITDA) were $60.5 million*.
Highlights of the Quarter "The quarter represents an encouraging
improvement from the challenges we faced earlier in the year," John
W. Casella, chairman and chief executive officer, said. "In
addition, our landfill development work continues to progress
towards our goal of adding incremental EBITDA arising from our
investment over the last two years," Casella said. * 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 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 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. Casella
Waste Systems, 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 Richard Norris, chief
financial officer; Ned Coletta, director of investor relations; 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, December 7,
2006 at 10:00 a.m. ET. Individuals interested in participating in
the call should dial (719) 457-2657 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 #7430652) before 11:59 p.m. ET, Thursday,
December 14, 2006, 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," "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: prices for our services fluctuate due to
reasons beyond our control; the development of landfills and other
disposal facilities is inherently risky and is subject to
political, regulatory, and other factors; we may be unable to make
acquisitions; we may be unable to reduce costs sufficiently to
achieve estimated EBITDA and other targets; anticipated revenue may
not materialize; 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 risks and uncertainties include, without limitation, those
detailed in Item 1A, "Risk Factors" in our Form 10-K for the year
ended April 30, 2006. We do not necessarily intend to update
publicly any forward-looking statements whether as a result of new
information, future events or otherwise. 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 Six Months
Ended October 31, October 31, 2005 2006 2005 2006 Collection
$66,152 $68,774 $131,419 $137,270 Landfill / disposal facilities
26,498 30,031 49,761 58,407 Transfer 11,913 11,636 23,562 23,946
Recycling 32,232 37,376 64,053 71,713 Total revenues $136,795
$147,817 $268,795 $291,336 Components of revenue growth for the
three months ended October 31, 2006 compared to the three months
ended October 31, 2005: Percentage Solid Waste Operations (1) Price
3.6% Volume -1.5% Solid waste commodity price and volume 0.3% Total
growth - Solid Waste Operations 2.4% FCR Operations (1) Price 2.8%
Volume 5.3% Total growth - FCR Operations 8.1% Rollover effect of
acquisitions (as a percentage of total revenues) 3.8% Divestitures
(as a percentage of total revenues) -0.4% Total revenue growth 8.0%
(1) - Calculated as a percentage of segment revenues. Solid Waste
Internalization Rates by Region: Three Months Ended Six Months
Ended October 31, October 31, 2005 2006 2005 2006 North Eastern
region 54.5% 57.8% 57.7% 57.6% South Eastern region 41.3% 41.6%
41.6% 41.0% Central region 79.2% 76.2% 78.7% 77.6% Western region
42.2% 49.1% 41.7% 49.7% Solid Waste Operations 55.4% 57.7% 55.6%
58.1% US GreenFiber (50% owned) Financial Statistics: Three Months
Ended Six Months Ended October 31, October 31, 2005 2006 2005 2006
Revenues $42,934 $52,094 $74,538 $96,490 Net Income 3,026 2,370
2,886 2,784 Cash flow from operations 5,456 1,619 9,965 9,798 Net
working capital changes 686 (3,544) 3,596 1,936 EBITDA $4,770
$5,163 $6,369 $7,862 As a percentage of revenue: Net income 7.0%
4.5% 3.9% 2.9% EBITDA 11.1% 9.9% 8.5% 8.1% Components of Growth
versus Maintenance Capital Expenditures (1): Three Months Ended Six
Months Ended October 31, October 31, 2005 2006 2005 2006 Growth
Capital Expenditures: Landfill Development $10,342 $5,461 $18,601
$11,483 Boston MRF Building - - 5,998 - MRF Equipment Upgrades -
2,412 - 3,257 Other 595 1,859 1,279 3,480 Total Growth Capital
Expenditures 10,937 9,732 25,878 18,220 Maintenance Capital
Expenditures: Vehicles, Machinery / Equipment and Containers 7,769
5,536 21,495 19,366 Landfill Construction & Equipment 8,470
11,474 12,782 19,551 Facilities 2,678 982 3,755 2,021 Other 430 260
989 1,097 Total Maintenance Capital Expenditures 19,347 18,252
39,021 42,035 Total Capital Expenditures $30,284 $27,984 $64,899
$60,255 (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. CASELLA
WASTE SYSTEMS, INC. AND SUBSIDIARIES 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, 2005 2006 2005 2006 Revenues $136,795 $147,817 $268,795
$291,336 Operating expenses: Cost of operations 87,985 94,182
173,670 189,917 General and administration 18,132 19,746 35,350
40,924 Depreciation and amortization 16,914 19,292 33,047 37,235
123,031 133,220 242,067 268,076 Operating income 13,764 14,597
26,728 23,260 Other expense/ (income), net: Interest expense, net
7,821 9,812 15,172 19,315 Income from equity method investments
(1,513) (867) (1,443) (990) Other income (75) (248) (123) (302)
6,233 8,697 13,606 18,023 Income before income taxes 7,531 5,900
13,122 5,237 Provision for income taxes 3,374 3,510 5,857 2,901 Net
income 4,157 2,390 7,265 2,336 Preferred stock dividend 854 892
1,704 1,772 Net income available to common stockholders $3,303
$1,498 $5,561 $564 Common stock and common stock equivalent shares
outstanding, assuming full dilution 25,358 25,510 25,277 25,667 Net
income per common share $0.13 $0.06 $0.22 $0.02 EBITDA (1) $30,678
$33,889 $59,775 $60,495 CASELLA WASTE SYSTEMS, INC. AND
SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS Unaudited (In
thousands) April 30, October 31, ASSETS 2006 2006 CURRENT ASSETS:
Cash and cash equivalents $7,429 $8,744 Restricted cash 72 73
Accounts receivable -- trade, net of allowance for doubtful
accounts 56,269 62,227 Other current assets 15,204 22,580 Total
current assets 78,974 93,624 Property, plant and equipment, net of
accumulated depreciation 481,284 503,452 Goodwill 171,258 171,841
Intangible assets, net 2,762 2,343 Restricted cash 17,887 12,405
Investments in unconsolidated entities 44,491 46,110 Other
non-current assets 14,455 13,443 $811,111 $843,218 LIABILITIES AND
STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Current maturities of
long-term debt $527 $1,130 Current maturities of capital lease
obligations 1,061 1,085 Accounts payable 46,364 50,653 Other
accrued liabilities 46,813 45,659 Total current liabilities 94,765
98,527 Long-term debt, less current maturities 452,720 470,418
Capital lease obligations, less current maturities 1,747 1,202
Other long-term liabilities 41,959 48,915 Series A redeemable,
convertible preferred stock 70,430 72,202 Stockholders' equity
149,490 151,954 $811,111 $843,218 CASELLA WASTE SYSTEMS, INC. AND
SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited (In thousands) Six Months Ended October 31, October 31,
2005 2006 Cash Flows from Operating Activities: Net income $7,265
$2,336 Adjustments to reconcile net income to net cash provided by
operating activities - Depreciation and amortization 33,047 37,235
Depletion of landfill operating lease obligations 2,974 3,861
Income from equity method investments (1,443) (990) (Gain) loss on
sale of equipment 41 (439) Stock-based compensation - 321 Excess
tax benefit on the exercise of stock options - (141) Deferred
income taxes 3,993 1,077 Changes in assets and liabilities, net of
effects of acquisitions and divestitures (9,273) (3,860) 29,339
37,064 Net Cash Provided by Operating Activities 36,604 39,400 Cash
Flows from Investing Activities: Acquisitions, net of cash acquired
(15,507) (1,034) Additions to property, plant and equipment -
growth (25,878) (18,220) - maintenance (39,021) (42,035) Payments
on landfill operating lease contracts (5,869) (2,033) Restricted
cash from revenue bond issuance - 5,535 Other 1,191 858 Net Cash
Used In Investing Activities (85,084) (56,929) Cash Flows from
Financing Activities: Proceeds from long-term borrowings 111,672
188,900 Principal payments on long-term debt (64,807) (171,097)
Proceeds from exercise of stock options 616 900 Excess tax benefit
on the exercise of stock options - 141 Net Cash Provided by
Financing Activities 47,481 18,844 Net increase (decrease) in cash
and cash equivalents (999) 1,315 Cash and cash equivalents,
beginning of period 8,578 7,429 Cash and cash equivalents, end of
period $7,579 $8,744 CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES
Unaudited (In thousands) Note 1: 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) 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 net
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 Net Cash
Provided by Operating Activities: Three Months Ended Six Months
Ended October October October October 31, 31, 31, 31, 2005 2006
2005 2006 Net Cash Provided by Operating Activities $13,983 $21,007
$36,604 $39,400 Changes in assets and liabilities, net of effects
of acquisitions and divestitures 9,335 3,961 9,273 3,860 Deferred
income taxes (2,272) (2,212) (3,993) (1,077) Stock-based
compensation - (187) - (321) Excess tax benefit on the exercise of
stock options - - - 141 Provision for income taxes 3,374 3,510
5,857 2,901 Interest expense, net 7,821 9,812 15,172 19,315
Depletion of landfill operating lease obligations (1,545) (1,937)
(2,974) (3,861) Gain (loss) on sale of equipment 57 183 (41) 439
Other expense, net (75) (248) (123) (302) EBITDA $30,678 $33,889
$59,775 $60,495 Following is a reconciliation of Free Cash Flow to
Net Cash Provided by Operating Activities: Three Months Ended Six
Months Ended October October October October 31, 31, 31, 31, 2005
2006 2005 2006 EBITDA $30,678 $33,889 $59,775 $60,495 Add (deduct):
Cash interest (12,546) (12,996) (12,823) (16,627) Capital
expenditures (30,284) (27,984) (64,899) (60,255) Cash taxes (531)
(936) (1,059) (1,592) Depletion of landfill operating lease
obligations 1,545 1,937 2,974 3,861 Change in working capital,
adjusted for non-cash items (4,098) (1,129) (10,894) (5,738) FREE
CASH FLOW (15,236) (7,219) (26,926) (19,856) Add (deduct): Capital
expenditures 30,284 27,984 64,899 60,255 Other (1,065) 242 (1,369)
(999) Net Cash Provided by Operating Activities $13,983 $21,007
$36,604 $39,400 DATASOURCE: Casella Waste Systems, Inc. CONTACT:
Richard Norris, chief financial officer, Ned Coletta, director of
investor relations, or Joseph Fusco, vice president, all of Casella
Waste Systems at +1-802-775-0325 Web site: http://www.casella.com/
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