RUTLAND, Vt., March 7 /PRNewswire-FirstCall/ -- Casella Waste
Systems, Inc. (NASDAQ:CWST), a regional, non-hazardous solid waste
services company, today reported financial results for the third
quarter and first nine months of its 2007 fiscal year. Third
Quarter Results For the quarter ended January 31, 2007, the company
reported revenues of $133.5 million, up $2.9 million, or 2.2
percent over the same quarter last year. The company's net loss per
common share was $0.07, compared to net income of $0.02 per share
in the same quarter last year. Operating income for the quarter was
$8.8 million, up $1.7 million or 23.9 percent over the same quarter
last year after deferred costs are excluded from fiscal year 2006
third quarter results. Cash provided by operating activities in the
quarter was $16.4 million, down $9.4 million, or 36.4 percent
compared to the same quarter last year. The company's earnings
before interest, taxes, depreciation and amortization (EBITDA) were
$26.0 million*, up $2.4 million, or 10.2 percent from the same
quarter last year. A reduction of $2.0 million in equity income
from the company's GreenFiber joint venture, and the expectation
that this reduction will continue into the fourth quarter,
increased the company's tax rate. These factors accounted for most
of the $0.07 loss per common share. For the nine months ended
January 31, 2007, the company reported revenues of $424.8 million.
The company's net loss per common share was $0.05. Operating income
for the nine month period was $32.1 million. Cash provided by
operating activities for the nine month period was $55.8 million.
The company's earnings before interest, taxes, depreciation and
amortization (EBITDA) were $86.5 million*. Highlights of the
Quarter "From an operating perspective, this was a solid quarter,"
John W. Casella, chairman and chief executive officer, said. "We
continue to drive efficiencies into, and costs out of, the
business, as well as driving pricing improvement across our solid
waste business throughout the quarter. "Regional economic
conditions had an impact on our overall results," Casella said.
"While landfill pricing is up, volumes remain a challenge. Our
GreenFiber unit was adversely impacted by the general slowdown in
the housing market and unseasonably warm weather." The Company also
said it believes its EBITDA* for fiscal year 2007 will be between
$110.0 million and $113.0 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 and deferred costs (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, March 8,
2007 at 10:00 a.m. ET. Individuals interested in participating in
the call should dial [(719) 457-2692] 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 #3642447)] before 11:59 p.m. ET,
Thursday, March 15, 2007, 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 CONSOLIDATED STATEMENTS OF
OPERATIONS Unaudited (In thousands, except amounts per share) Three
Months Ended Nine Months Ended January January January January 31,
31, 31, 31, 2006 2007 2006 2007 Revenues $130,597 $133,492 $399,392
$424,828 Operating expenses: Cost of operations 89,034 89,800
262,704 279,717 General and administration 17,946 17,653 53,296
58,578 Depreciation and amortization 16,525 17,223 49,572 54,457
Deferred costs 1,329 - 1,329 - 124,834 124,676 366,901 392,752
Operating income 5,763 8,816 32,491 32,076 Other expense/(income),
net: Interest expense, net 8,188 10,010 23,359 29,324 Income from
equity method investments (3,319) (988) (4,762) (1,978) Other
income (1,541) (50) (1,664) (351) 3,328 8,972 16,933 26,995 Income
(loss) before income taxes 2,435 (156) 15,558 5,081 Provision for
income taxes 1,148 689 7,005 3,590 Net income (loss) 1,287 (845)
8,553 1,491 Preferred stock dividend 859 902 2,563 2,674 Net (loss)
income available to common stockholders $428 $(1,747) $5,990
$(1,183) Common stock and common stock equivalent shares
outstanding, assuming full dilution 25,413 25,273 25,296 25,257 Net
(loss) income per common share $0.02 $(0.07) $0.24 $(0.05) EBITDA
(1) $23,617 $26,039 $83,392 $86,533 CASELLA WASTE SYSTEMS, INC. AND
SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS Unaudited (In
thousands) April 30 January 31, ASSETS 2006 2007 CURRENT ASSETS:
Cash and cash equivalents $7,429 $11,929 Restricted cash 72 73
Accounts receivable - trade, net of allowance for doubtful accounts
56,269 57,839 Other current assets 15,204 23,395 Total current
assets 78,974 93,236 Property, plant and equipment, net of
accumulated depreciation 481,284 506,797 Goodwill 171,258 172,731
Intangible assets, net 2,762 2,276 Restricted cash 17,887 12,518
Investments in unconsolidated entities 44,491 48,811 Other
non-current assets 14,455 13,242 $811,111 $849,611 LIABILITIES AND
STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Current maturities of
long-term debt $527 $1,132 Current maturities of capital lease
obligations 1,061 1,096 Accounts payable 46,364 41,316 Other
accrued liabilities 46,813 51,834 Total current liabilities 94,765
95,378 Long-term debt, less current maturities 452,720 479,370
Capital lease obligations, less current maturities 1,747 925 Other
long-term liabilities 41,959 50,468 Series A redeemable,
convertible preferred stock 70,430 73,104 Stockholders' equity
149,490 150,366 $811,111 $849,611 CASELLA WASTE SYSTEMS, INC. AND
SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited (In thousands) Nine Months Ended January 31, January 31,
2006 2007 Cash Flows from Operating Activities: Net income $8,553
$1,491 Adjustments to reconcile net income to net cash provided by
operating activities - Depreciation and amortization 49,572 54,457
Depletion of landfill operating lease obligations 4,651 5,543
Income from equity method investments (4,762) (1,978) Deferred
costs 1,329 - (Gain) loss on sale of equipment 233 (591)
Stock-based compensation - 511 Excess tax benefit on the exercise
of stock options - (145) Deferred income taxes 4,012 464 Changes in
assets and liabilities, net of effects of acquisitions and
divestitures (1,145) (3,949) 53,890 54,312 Net Cash Provided by
Operating Activities 62,443 55,803 Cash Flows from Investing
Activities: Acquisitions, net of cash acquired (19,226) (2,087)
Additions to property, plant and equipment - growth (36,552)
(25,757) - maintenance (51,608) (52,592) Payments on landfill
operating lease contracts (8,450) (4,500) Restricted cash from
revenue bond issuance - 5,535 Other (1,463) (110) Net Cash Used In
Investing Activities (117,299) (79,511) Cash Flows from Financing
Activities: Proceeds from long-term borrowings 159,733 239,950
Principal payments on long-term debt (104,581) (213,459) Proceeds
from exercise of stock options 1,151 1,572 Excess tax benefit on
the exercise of stock options - 145 Net Cash Provided by Financing
Activities 56,303 28,208 Net increase in cash and cash equivalents
1,447 4,500 Cash and cash equivalents, beginning of period 8,578
7,429 Cash and cash equivalents, end of period $10,025 $11,929
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
deferred costs) 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 Nine Months
Ended January January January January 31, 31, 31, 31, 2006 2007
2006 2007 Net Cash Provided by Operating Activities $25,839 $16,403
$62,443 $55,803 Changes in assets and liabilities, net of effects
of acquisitions and divestitures (8,128) 89 1,145 3,949 Deferred
income taxes (19) 613 (4,012) (464) Stock-based compensation -
(190) - (511) Excess tax benefit on the exercise of stock options -
4 - 145 Provision for income taxes 1,148 689 7,005 3,590 Interest
expense, net 8,188 10,010 23,359 29,324 Depletion of landfill
operating lease obligations (1,678) (1,681) (4,651) (5,543) Gain
(loss) on sale of equipment (192) 152 (233) 591 Other income
(1,541) (50) (1,664) (351) EBITDA $23,617 $26,039 $83,392 $86,533
Following is a reconciliation of Free Cash Flow to Net Cash
Provided by Operating Activities: Three Months Ended Nine Months
Ended January January January January 31, 31, 31, 31, 2006 2007
2006 2007 EBITDA $23,617 $26,039 $83,392 $86,533 Add (deduct): Cash
interest (3,557) (5,069) (16,379) (21,696) Capital expenditures
(23,261) (18,094) (88,160) (78,349) Cash taxes (240) (648) (1,299)
(2,241) Depletion of landfill operating lease obligations 1,677
1,682 4,651 5,543 Change in working capital, adjusted for non-cash
items 2,934 (5,879) (7,969) (11,513) FREE CASH FLOW 1,170 (1,969)
(25,764) (21,723) Add (deduct): Capital expenditures 23,261 18,094
88,160 78,349 Other 1,408 278 47 (823) Net Cash Provided by
Operating Activities $25,839 $16,403 $62,443 $55,803 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 Nine Months
Ended January 31, January 31, 2006 2007 2006 2007 Collection
$61,310 $62,478 $192,729 $199,748 Landfill / disposal facilities
24,167 24,183 73,928 82,590 Transfer 10,713 9,255 34,275 33,200
Recycling 34,407 37,576 98,460 109,290 Total revenues $130,597
$133,492 $399,392 $424,828 Components of revenue growth for the
three months ended January 31, 2007 compared to the three months
ended January 31, 2006: Percentage Solid Waste Operations (1) Price
3.3% Volume -4.8% Solid waste commodity price and volume 0.3% Total
growth - Solid Waste Operations -1.2% FCR Operations (1) Price 0.1%
Volume 5.2% Total growth - FCR Operations 5.3% Rollover effect of
acquisitions (as a percentage of total revenues) 1.2% Divestitures
(as a percentage of total revenues) 0.0% Total revenue growth 2.2%
(1) -- Calculated as a percentage of segment revenues. Solid Waste
Internalization Rates by Region: Three Months Ended Nine Months
Ended January 31, January 31, 2006 2007 2006 2007 North Eastern
region 56.8% 52.8% 57.5% 56.1% South Eastern region 39.6% 45.3%
40.9% 42.2% Central region 79.7% 77.1% 79.0% 77.4% Western region
44.1% 46.8% 42.4% 48.8% Solid Waste Operations 57.0% 57.1% 56.0%
57.8% US GreenFiber (50% owned) Financial Statistics: Three Months
Ended Nine Months Ended January 31, January 31, 2006 2007 2006 2007
Revenues $57,484 $48,999 $132,022 $145,525 Net income 6,632 2,634
9,524 5,418 Cash flow from operations 1,980 3,833 11,945 13,076 Net
working capital changes (6,544) (1,439) (2,948) (58) EBITDA $8,524
$5,272 $14,893 $13,134 As a percentage of revenue: Net income 11.5%
5.4% 7.2% 3.7% EBITDA 14.8% 10.8% 11.3% 9.0% Components of Growth
versus Maintenance Capital Expenditures (1): Three Months Ended
Nine Months Ended January 31, January 31, 2006 2007 2006 2007
Growth Capital Expenditures: Landfill Development $8,733 $3,282
$27,334 $14,765 Boston MRF Building - - 5,998 - MRF Equipment
Upgrades - 2,982 - 6,239 Other 1,940 1,273 3,220 4,753 Total Growth
Capital Expenditures 10,673 7,537 36,552 25,757 Maintenance Capital
Expenditures: Vehicles, Machinery / Equipment and Containers 2,119
2,266 23,620 21,632 Landfill Construction & Equipment 8,728
7,300 22,769 26,851 Facilities 1,209 900 4,260 2,921 Other 532 91
959 1,188 Total Maintenance Capital Expenditures 12,588 10,557
51,608 52,592 Total Capital Expenditures $23,261 $18,094 $88,160
$78,349 (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.
DATASOURCE: Casella Waste Systems, Inc. CONTACT: Richard Norris,
chief financial officer, or Ned Coletta, director of investor
relations, or Joseph Fusco, vice president, all of Casella Waste
Systems, Inc., +1-802-775-0325 Web site: http://www.casella.com/
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