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,
----------------------------------------------
% of Total % of Total
2012 Revenue 2011 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,
----------------------------------------------
% of Total % of Total
2012 Revenue 2011 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:
% of % of Solid
Related Waste % of Total
Amount Business Operations 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%
----------- ==========
% of
Recycling
Recycling Operations: 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 Six Months Ended
October 31, 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 Six Months Ended
October 31, 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 Six Months Ended
October 31, 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.
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
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