RUTLAND, Vt., Dec. 6 /PRNewswire-FirstCall/ -- Casella Waste Systems, Inc. , 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
