Casella Waste Systems, Inc. (NASDAQ:CWST), a regional solid waste,
recycling and resource management services company, today reported
its financial results for the three month period ended June 30,
2016. The company also increased its Adjusted EBITDA*
guidance and reaffirmed its revenue and Free Cash Flow* guidance
for the year ending December 31, 2016.
Highlights for the Three Months Ended
June 30, 2016:
- Revenues were $144.7 million for the quarter, up $1.0 million,
or 0.7%, from the same period in 2015.
- Net income was $5.2 million for the quarter, an improvement of
$4.2 million from the same period in 2015.
- Adjusted EBITDA was $34.8 million for the quarter, an
improvement of $4.1 million, or 13.3%, from the same period in
2015.
- Adjusted Operating Income* for the quarter was $15.6 million,
an improvement of $4.6 million, or 42.4%, from the same period in
2015.
- Overall solid waste pricing for the quarter was up 3.5%, mainly
driven by strong collection pricing up 4.8%.
“We had another strong quarter as our team executed well against
our key management strategies as the regional economy continued to
strengthen,” said John W. Casella, chairman and CEO of Casella
Waste Systems, Inc. “Our results clearly demonstrated this
improvement, with operating income up $4.2 million and margins up
290 bps year-over-year in the second quarter.”
“Achievement of our strategies is clearly driving positive
results, with residential and commercial collection pricing up 5.3%
on our focused pricing programs,” Casella said. “Further, our
efforts to reduce operating costs and drive efficiencies continue
to gain traction across each line-of-business with cost of
operations as a percentage of revenues down 290 bps
year-over-year. Recycling operating income was up $0.9
million year-over-year as our efforts to reshape the recycling
business model has improved financial performance in these low
commodity markets and helped to mitigate commodity risk.
Finally, we continue to expand profitable revenues through our
innovative resource solutions offerings.”
“As expected, we did experience volume headwinds at the
landfills during the quarter, with tons down 8.4% year-over-year,
as the unseasonably warm northeast winter resulted in a
pull-forward of volumes from the second quarter to the first
quarter, our efforts to improve price at select sites has dampened
volume growth, and energy related waste streams were down in the
Marcellus,” Casella said. “With that said, landfill volumes
year-to-date were up 51,000 tons, or 2.6%, year-over-year, with
particular strength in construction and demolition volumes, which
were up 124,000 tons year-over-year.”
“Over the last several months, we continued to redeem and
repurchase our 7.75% Senior Subordinated Notes due 2019, with $39.4
million of these bonds being permanently retired through July 1,
2016,” Casella said. “Through our continued cash flow growth
and debt repayment, we further reduced our consolidated leverage
ratio during the second quarter. Going forward, we remain
committed to reducing leverage and improving free cash flow
generation by using excess cash to retire our highest cost
debt.”
“In closing, I am very pleased with our financial and
operational performance during the quarter, and believe that we are
well positioned to continue to execute for the remainder of fiscal
year 2016 and beyond,” Casella said.
For the quarter, revenues were $144.7 million, up $1.0 million,
or 0.7%, from the same period in 2015, with revenue growth mainly
driven by robust collection, disposal and recycling commodity
pricing, the acquisition of three transfer stations, and higher
volumes in our organics line-of-business, partially offset by lower
landfill and low margin transportation volumes.
Net income attributable to common stockholders was $5.2 million,
or $0.12 per diluted common share for the quarter, compared to net
income attributable to common stockholders of $1.0 million, or
$0.03 per diluted common share for the same period in 2015.
The current quarter included a $0.6 million loss on debt
extinguishment related to the redemption, repurchase and permanent
retirement of $15.5 million of our 7.75% Senior Subordinated Notes
due 2019, while the same quarter last year included a $0.7 million
gain on the divestiture of non-strategic collection
routes.
Operating income was $15.6 million for the quarter, up $4.3
million from the same period in 2015, whereas Adjusted Operating
Income was $15.6 million for the quarter, up $4.6 million from the
same period in 2015. Adjusted EBITDA was $34.8 million for
the quarter, up $4.1 million from the same period in 2015, with
growth mainly driven by improved performance in the collection,
recycling, organics and customer solutions
lines-of-business.
Net cash provided by operating activities was $33.9 million in
the quarter, up $4.3 million from the same period in 2015.
Free Cash Flow was $18.0 million in the quarter, as compared to
$18.3 million for the same period in 2015. Normalized Free
Cash Flow* was $18.0 million in the quarter, as compared to $18.6
million for the same period in 2015. The current quarter did
not include any adjustments, while the same period in 2015 included
a $0.3 million adjustment for the cash outlays associated with
capping at our Worcester landfill.
Highlights for the Six Months Ended
June 30, 2016:
- Revenues year-to-date were $270.1 million, up $9.8 million, or
3.8%, from the same period in 2015.
- Net loss year-to-date was ($2.4) million, an improvement of
$4.6 million from the same period in 2015.
- Adjusted EBITDA year-to-date was $54.1 million, an improvement
of $8.9 million, or 19.6%, from the same period in 2015.
- Adjusted Operating income year-to-date was $17.6 million, an
improvement of $8.4 million, or 92.2%, from the same period in
2015.
For the six months ended June 30, 2016, revenues were $270.1
million, up $9.8 million, or 3.8%, from the same period in 2015,
mainly driven by robust collection and disposal pricing, and higher
volumes in our organics line-of-business, partially offset by lower
disposal volumes and lower energy pricing.
Net loss attributable to common stockholders was ($2.4) million,
or ($0.06) per diluted common share year-to-date, compared to
($8.2) million, or ($0.20) per diluted common share for the same
period in 2015.
Operating income was $17.6 million year-to-date, up $3.1 million
from the same period in 2015. Adjusted Operating Income was
$17.6 million year-to-date, up $8.4 million from the same period in
2015. Adjusted EBITDA was $54.1 million year-to-date, up $8.9
million from the same period in 2015.
Net cash provided by operating activities was $35.6 million
year-to-date, up $11.7 million from the same period in 2015.
Free Cash Flow was $9.8 million year-to-date, as compared to $10.8
million for the same period in 2015. Normalized Free Cash
Flow was $9.8 million year-to-date, as compared to $8.3 million for
the same period in 2015. The current year-to-date period did
not include any adjustments, while the same period in 2015 included
a $3.1 million adjustment for the net cash proceeds from the CARES
dissolution and a $0.6 million adjustment for the cash outlays
associated with capping at the Worcester landfill.
Outlook
Given our strong pricing and operational efficiency performance
year-to-date, the company is increasing its Adjusted EBITDA
guidance for the year ending December 31, 2016 by estimating
results in the following range:
- Adjusted EBITDA between $113 million and $116 million
(increased from a range of $111 million to $115 million).
The company reaffirms its Revenue and Free Cash Flow guidance
for the year by estimating results in the following ranges:
- Revenues between $550 million and $560 million; and
- Free Cash Flow between $20 million and $24 million.
Capital expenditures are projected to be between $50 million and
$54 million for the year, up from our previously announced range
due to higher construction costs associated with the time-sensitive
construction schedule at the Ontario landfill that faced
significant permitting delays in 2015.
The company does not provide reconciling information for
forward-looking periods because such information is not available
without an unreasonable effort. The company believes that
such information is not significant to an understanding of its
non-GAAP measures for forward-looking periods because its
methodology for calculating such non-GAAP measures is based on
sensitivity analysis compared to budget at the business unit level
rather than on differences from GAAP financial measures.
Conference call to discuss quarter
The company will host a conference call to discuss these results
on Friday, July 29, 2016 at 10:00 a.m. Eastern Time.
Individuals interested in participating in the call should dial
(877) 838-4153 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
48538723) until 1:00 p.m. ET on August 5, 2016.
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, Chief Financial Officer 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.
*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, and depreciation and amortization, adjusted for
accretion, depletion of landfill operating lease obligations, gains
on asset sales, development project charge write-offs, contract
settlement charges, legal settlement costs, tax settlement costs,
bargain purchase gains, asset impairment charges, environmental
remediation charges, severance and reorganization costs, expenses
from divestiture, acquisition and financing costs, gains on the
settlement of acquisition related contingent consideration, fiscal
year-end transition costs, proxy contest costs, as well as impacts
from divestiture transactions (“Adjusted EBITDA”), which is a
non-GAAP measure.
The company also discloses earnings before interest and taxes,
adjusted for gains on asset sales, development project charge
write-offs, contract settlement charges, legal settlement costs,
tax settlement costs, bargain purchase gains, asset impairment
charges, environmental remediation charges, severance and
reorganization costs, expenses from divestiture, acquisition and
financing costs, gains on the settlement of acquisition related
contingent consideration, fiscal year-end transition costs, proxy
contest costs, as well as impacts from divestiture transactions
(“Adjusted Operating Income”), which is a non-GAAP
measure.
The company also discloses net cash provided by operating
activities, less capital expenditures (excluding acquisition
related capital expenditures), less payments on landfill operating
lease contracts, plus proceeds from divestiture transactions, plus
proceeds from the sale of property and equipment, plus proceeds
from property insurance settlement, less contributions from
(distributions to) noncontrolling interest holders (“Free Cash
Flow”), which is a non-GAAP measure.
And lastly, the company discloses Free Cash Flow plus certain
cash outflows associated with landfill closure, site improvement
and remediation expenditures, plus certain cash outflows associated
with new contract and project capital expenditures, plus cash
(inflows) outflows associated with certain business dissolutions
(“Normalized Free Cash Flow”), which is a non-GAAP measure.
Adjusted EBITDA and Adjusted Operating Income are reconciled to
net loss, while Free Cash Flow and Normalized Free Cash Flow are
reconciled to net cash provided by operating
activities.
The company presents Adjusted EBITDA, Adjusted Operating Income,
Free Cash Flow, and Normalized 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” is helpful in
understanding its ongoing performance in the ordinary course of
operations. The company believes that providing Adjusted EBITDA,
Adjusted Operating Income, Free Cash Flow, and Normalized 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 has performed.
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.
Non-GAAP financial measures are not in accordance with or an
alternative for GAAP. Adjusted EBITDA, Adjusted Operating
Income, Free Cash Flow, and Normalized 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, Free Cash Flow, or
Normalized Free Cash Flow presented by other companies.
Safe Harbor Statement
Certain matters discussed in this press release, including, but
not limited to, the statements regarding financial results and
guidance, 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,” “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 financial results, 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: adverse
weather conditions that have negatively impacted and may continue
to negatively impact our revenues and our operating margin; current
economic conditions that have adversely affected and may continue
to adversely affect our revenues and our operating margin; we may
be unable to increase volumes at our landfills or improve our route
profitability; our need to service our indebtedness may limit our
ability to invest in our business; 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; groundwater
contamination discovered near our Southbridge landfill may delay
our permitting activities at that landfill and result in costs and
liabilities as well as impacting our disposal revenues at that
site, each of which could impact our results of operations; 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
actions of activist investors and the cost and disruption of
responding to those actions. 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 fiscal year ended December 31, 2015.
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 June
30, |
|
Six Months
Ended June
30, |
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
$ |
144,670 |
|
|
$ |
143,714 |
|
|
$ |
270,103 |
|
|
$ |
260,292 |
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
Cost of operations |
|
95,188 |
|
|
|
98,737 |
|
|
|
185,606 |
|
|
|
186,569 |
|
General and administration |
|
18,084 |
|
|
|
18,071 |
|
|
|
36,672 |
|
|
|
34,876 |
|
Depreciation and amortization |
|
15,802 |
|
|
|
16,241 |
|
|
|
30,255 |
|
|
|
29,990 |
|
Divestiture transactions |
|
- |
|
|
|
(677 |
) |
|
|
- |
|
|
|
(5,611 |
) |
|
|
129,074 |
|
|
|
132,372 |
|
|
|
252,533 |
|
|
|
245,824 |
|
|
|
|
|
|
|
|
|
Operating income |
|
15,596 |
|
|
|
11,342 |
|
|
|
17,570 |
|
|
|
14,468 |
|
|
|
|
|
|
|
|
|
Other expense
(income): |
|
|
|
|
|
|
|
Interest expense, net |
|
9,944 |
|
|
|
10,080 |
|
|
|
19,870 |
|
|
|
20,065 |
|
Loss on debt extinguishment |
|
593 |
|
|
|
- |
|
|
|
545 |
|
|
|
521 |
|
Loss on derivative instruments |
|
- |
|
|
|
47 |
|
|
|
- |
|
|
|
198 |
|
Other income |
|
(363 |
) |
|
|
(46 |
) |
|
|
(504 |
) |
|
|
(209 |
) |
Other expense, net |
|
10,174 |
|
|
|
10,081 |
|
|
|
19,911 |
|
|
|
20,575 |
|
|
|
|
|
|
|
|
|
Income (loss) before
income taxes |
|
5,422 |
|
|
|
1,261 |
|
|
|
(2,341 |
) |
|
|
(6,107 |
) |
Provision for income
taxes |
|
230 |
|
|
|
318 |
|
|
|
81 |
|
|
|
914 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
5,192 |
|
|
|
943 |
|
|
|
(2,422 |
) |
|
|
(7,021 |
) |
|
|
|
|
|
|
|
|
Less: Net (loss) income
attributable to noncontrolling interests |
|
(3 |
) |
|
|
(82 |
) |
|
|
(9 |
) |
|
|
1,226 |
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to common stockholders |
$ |
5,195 |
|
|
$ |
1,025 |
|
|
$ |
(2,413 |
) |
|
$ |
(8,247 |
) |
|
|
|
|
|
|
|
|
Basic
weighted average common shares outstanding |
|
41,132 |
|
|
|
40,447 |
|
|
|
41,064 |
|
|
|
40,432 |
|
|
|
|
|
|
|
|
|
Basic
earnings per share |
$ |
0.13 |
|
|
$ |
0.03 |
|
|
$ |
(0.06 |
) |
|
$ |
(0.20 |
) |
|
|
|
|
|
|
|
|
Diluted
weighted average common shares outstanding |
|
41,598 |
|
|
|
40,846 |
|
|
|
41,064 |
|
|
|
40,432 |
|
|
|
|
|
|
|
|
|
Diluted
earnings per common share |
$ |
0.12 |
|
|
$ |
0.03 |
|
|
$ |
(0.06 |
) |
|
$ |
(0.20 |
) |
|
|
|
|
|
|
|
|
Adjusted
EBITDA |
$ |
34,787 |
|
|
$ |
30,715 |
|
|
$ |
54,050 |
|
|
$ |
45,194 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASELLA WASTE SYSTEMS, INC. AND
SUBSIDIARIES |
CONDENSED CONSOLIDATED BALANCE
SHEETS |
(Unaudited) |
(In thousands) |
|
|
|
|
ASSETS |
June 30,
2016 |
|
December 31,
2015 |
|
(Unaudited) |
|
|
CURRENT ASSETS: |
|
|
|
Cash and cash equivalents |
$ |
2,382 |
|
|
$ |
2,312 |
|
Accounts receivable - trade, net of
allowance for doubtful accounts |
|
61,083 |
|
|
|
60,167 |
|
Other current assets |
|
15,124 |
|
|
|
14,189 |
|
Total current assets |
|
78,589 |
|
|
|
76,668 |
|
|
|
|
|
Property, plant and
equipment, net of accumulated depreciation and amortization |
|
398,747 |
|
|
|
402,252 |
|
Goodwill |
|
119,899 |
|
|
|
118,976 |
|
Intangible assets,
net |
|
8,425 |
|
|
|
9,252 |
|
Restricted assets |
|
1,762 |
|
|
|
2,251 |
|
Cost method
investments |
|
12,333 |
|
|
|
12,333 |
|
Other non-current
assets |
|
11,866 |
|
|
|
11,937 |
|
|
|
|
|
Total assets |
$ |
631,621 |
|
|
$ |
633,669 |
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' DEFICIT |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES: |
|
|
|
|
|
|
|
Current maturities of long-term
debt and capital leases |
$ |
1,411 |
|
|
$ |
1,448 |
|
Accounts payable |
|
46,037 |
|
|
|
44,921 |
|
Other accrued liabilities |
|
37,186 |
|
|
|
38,977 |
|
Total current
liabilities |
|
84,634 |
|
|
|
85,346 |
|
|
|
|
|
Long-term debt and capital
leases, less current maturities |
|
501,804 |
|
|
|
505,985 |
|
Other long-term
liabilities |
|
67,372 |
|
|
|
63,935 |
|
|
|
|
|
Total stockholders'
deficit |
|
(22,189 |
) |
|
|
(21,597 |
) |
|
|
|
|
Total liabilities and stockholders'
deficit |
$ |
631,621 |
|
|
$ |
633,669 |
|
|
|
|
|
CASELLA WASTE SYSTEMS, INC. AND
SUBSIDIARIES |
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS |
(Unaudited) |
(In thousands) |
|
|
|
|
|
Six Months Ended June
30, |
|
|
2016 |
|
|
|
2015 |
|
|
|
|
|
Cash Flows from
Operating Activities: |
|
|
|
Net
loss |
$ |
(2,422 |
) |
|
$ |
(7,021 |
) |
Adjustments to
reconcile net loss to net cash provided by operating activities
- |
|
|
|
|
|
Depreciation and
amortization |
|
30,255 |
|
|
|
29,990 |
|
Depletion of landfill
operating lease obligations |
|
4,443 |
|
|
|
4,359 |
|
Interest accretion on
landfill and environmental remediation liabilities |
|
1,782 |
|
|
|
1,704 |
|
Amortization of debt issuance
costs and discount on long-term debt |
|
2,079 |
|
|
|
1,999 |
|
Stock-based compensation
expense |
|
1,622 |
|
|
|
1,435 |
|
Gain on sale of property and
equipment |
|
(520 |
) |
|
|
(93 |
) |
Divestiture
transactions |
|
- |
|
|
|
(5,611 |
) |
Loss on debt
extinguishment |
|
545 |
|
|
|
521 |
|
Loss on derivative
instruments |
|
- |
|
|
|
198 |
|
Excess tax benefit on the
vesting of share based awards |
|
- |
|
|
|
(153 |
) |
Deferred income
taxes |
|
303 |
|
|
|
416 |
|
Changes in assets and
liabilities, net of effects of acquisitions and
divestitures |
|
(2,502 |
) |
|
|
(3,855 |
) |
Net cash provided by
operating activities |
|
35,585 |
|
|
|
23,889 |
|
Cash Flows from
Investing Activities: |
|
|
|
Acquistions, net of cash
acquired |
|
(2,439 |
) |
|
|
- |
|
Acquisition related additions
to property, plant and equipment |
|
(38 |
) |
|
|
- |
|
Additions to property, plant
and equipment |
|
(23,460 |
) |
|
|
(16,311 |
) |
Payments on landfill
operating lease contracts |
|
(3,326 |
) |
|
|
(1,425 |
) |
Proceeds from divestiture
transactions |
|
- |
|
|
|
5,335 |
|
Proceeds from sale of
property and equipment |
|
957 |
|
|
|
259 |
|
Proceeds from property
insurance settlement |
|
- |
|
|
|
546 |
|
Net cash used in investing
activities |
|
(28,306 |
) |
|
|
(11,596 |
) |
Cash Flows from
Financing Activities: |
|
|
|
Proceeds from long-term
borrowings |
|
126,000 |
|
|
|
231,728 |
|
Principal payments on
long-term debt |
|
(132,716 |
) |
|
|
(239,340 |
) |
Payments of debt issuance
costs |
|
(682 |
) |
|
|
(8,063 |
) |
Payments of debt
extinguishment costs |
|
(310 |
) |
|
|
- |
|
Excess tax benefit on the
vesting of share based awards |
|
- |
|
|
|
153 |
|
Change in restricted
cash |
|
499 |
|
|
|
5,677 |
|
Distribution to
noncontrolling interest holder |
|
- |
|
|
|
(1,495 |
) |
Net cash used in financing
activities |
|
(7,209 |
) |
|
|
(11,340 |
) |
Net increase in cash and cash equivalents |
|
70 |
|
|
|
953 |
|
Cash and cash equivalents, beginning of period |
|
2,312 |
|
|
|
2,205 |
|
Cash and cash equivalents, end of period |
$ |
2,382 |
|
|
$ |
3,158 |
|
|
|
|
|
Supplemental Disclosures of Cash Flow Information: |
|
|
|
Cash interest |
$ |
18,394 |
|
|
$ |
17,063 |
|
Cash income taxes, net of
refunds |
$ |
203 |
|
|
$ |
55 |
|
|
|
|
|
Supplemental
Disclosures of Non-Cash Investing and Financing
Activities: |
|
|
|
Non-current assets obtained through long-term
obligations |
$ |
866 |
|
|
$ |
- |
|
CASELLA WASTE SYSTEMS, INC. AND
SUBSIDIARIES |
RECONCILIATION OF CERTAIN NON-GAAP
MEASURES |
(Unaudited) |
(In thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Following is a reconciliation of Net Income (Loss) to
Adjusted EBITDA and Adjusted Operating Income: |
|
|
|
|
|
|
|
|
|
Three Months
Ended June 30, |
|
Six Months
Ended June
30, |
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
|
|
|
|
|
Net
income (loss) |
$ |
5,192 |
|
|
$ |
943 |
|
|
$ |
(2,422 |
) |
|
$ |
(7,021 |
) |
Provision for income taxes |
|
230 |
|
|
|
318 |
|
|
|
81 |
|
|
|
914 |
|
Other income |
|
(363 |
) |
|
|
(46 |
) |
|
|
(504 |
) |
|
|
(209 |
) |
Loss on derivative instruments |
|
- |
|
|
|
47 |
|
|
|
- |
|
|
|
198 |
|
Loss on debt extinguishment |
|
593 |
|
|
|
- |
|
|
|
545 |
|
|
|
521 |
|
Interest expense, net |
|
9,944 |
|
|
|
10,080 |
|
|
|
19,870 |
|
|
|
20,065 |
|
Divestiture transactions |
|
- |
|
|
|
(677 |
) |
|
|
- |
|
|
|
(5,611 |
) |
Depreciation and amortization |
|
15,802 |
|
|
|
16,241 |
|
|
|
30,255 |
|
|
|
29,990 |
|
Proxy contest costs |
|
- |
|
|
|
284 |
|
|
|
- |
|
|
|
284 |
|
Depletion of landfill operating
lease obligations |
|
2,493 |
|
|
|
2,669 |
|
|
|
4,443 |
|
|
|
4,359 |
|
Interest accretion on landfill and
environmental remediation liabilities |
|
896 |
|
|
|
856 |
|
|
|
1,782 |
|
|
|
1,704 |
|
Adjusted EBITDA |
$ |
34,787 |
|
|
$ |
30,715 |
|
|
$ |
54,050 |
|
|
$ |
45,194 |
|
Depreciation and amortization |
|
(15,802 |
) |
|
|
(16,241 |
) |
|
|
(30,255 |
) |
|
|
(29,990 |
) |
Depletion of landfill operating
lease obligations |
|
(2,493 |
) |
|
|
(2,669 |
) |
|
|
(4,443 |
) |
|
|
(4,359 |
) |
Interest accretion on landfill and
environmental remediation liabilities |
|
(896 |
) |
|
|
(856 |
) |
|
|
(1,782 |
) |
|
|
(1,704 |
) |
Adjusted Operating
Income |
$ |
15,596 |
|
|
$ |
10,949 |
|
|
$ |
17,570 |
|
|
$ |
9,141 |
|
|
|
|
|
|
|
|
|
|
Following is a reconciliation of Net Cash Provided By
Operating Activities to Free Cash Flow and Normalized Free Cash
Flow: |
|
|
Three Months Ended June
30, |
|
Six Months Ended June
30, |
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
Net
Cash Provided By Operating Activities |
$ |
33,861 |
|
|
$ |
29,584 |
|
|
$ |
35,585 |
|
|
$ |
23,889 |
|
Capital expenditures |
|
(13,612 |
) |
|
|
(11,867 |
) |
|
|
(23,460 |
) |
|
|
(16,311 |
) |
Payments on landfill
operating lease contracts |
|
(2,826 |
) |
|
|
(947 |
) |
|
|
(3,326 |
) |
|
|
(1,425 |
) |
Proceeds from divestiture
transactions |
|
- |
|
|
|
785 |
|
|
|
- |
|
|
|
5,335 |
|
Proceeds from sale of
property and equipment |
|
598 |
|
|
|
170 |
|
|
|
957 |
|
|
|
259 |
|
Proceeds from property
insurance settlement |
|
- |
|
|
|
546 |
|
|
|
- |
|
|
|
546 |
|
Distribution to
noncontrolling interest holder |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(1,495 |
) |
Free Cash
Flow |
$ |
18,021 |
|
|
$ |
18,271 |
|
|
$ |
9,756 |
|
|
$ |
10,798 |
|
Landfill closure, site improvement
and remediation expenditures (i) |
|
- |
|
|
|
319 |
|
|
|
- |
|
|
|
553 |
|
Net cash proceeds from CARES
dissolution (ii) |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(3,055 |
) |
Normalized Free Cash
Flow |
$ |
18,021 |
|
|
$ |
18,590 |
|
|
$ |
9,756 |
|
|
$ |
8,296 |
|
|
|
|
|
|
|
|
|
(i) Includes cash outlays associated with Worcester landfill
capping. |
(ii) Includes cash proceeds and cash distribution associated
with the dissolution of CARES. |
|
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 June 30, 2016 and 2015
are as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
|
|
|
|
2016 |
|
|
% of Total Revenue |
|
|
2015 |
|
% of Total Revenue |
|
|
Collection |
|
$ |
63,685 |
|
|
|
44.0 |
% |
|
$ |
60,636 |
|
|
42.2 |
% |
|
|
Disposal |
|
|
39,384 |
|
|
|
27.2 |
% |
|
|
44,064 |
|
|
30.6 |
% |
|
|
Power generation |
|
|
1,460 |
|
|
|
1.0 |
% |
|
|
1,564 |
|
|
1.1 |
% |
|
|
Processing |
|
|
1,747 |
|
|
|
1.3 |
% |
|
|
1,665 |
|
|
1.2 |
% |
|
|
Solid waste
operations |
|
|
106,276 |
|
|
|
73.5 |
% |
|
|
107,929 |
|
|
75.1 |
% |
|
|
Organics |
|
|
12,171 |
|
|
|
8.4 |
% |
|
|
10,847 |
|
|
7.5 |
% |
|
|
Customer solutions |
|
|
13,407 |
|
|
|
9.3 |
% |
|
|
13,476 |
|
|
9.4 |
% |
|
|
Recycling |
|
|
12,816 |
|
|
|
8.8 |
% |
|
|
11,462 |
|
|
8.0 |
% |
|
|
Total
revenues |
|
$ |
144,670 |
|
|
|
100.0 |
% |
|
$ |
143,714 |
|
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
|
|
|
|
|
2016 |
|
|
% of Total Revenue |
|
|
2015 |
|
% of Total Revenue |
|
|
Collection |
|
$ |
121,536 |
|
|
|
45.0 |
% |
|
$ |
113,962 |
|
|
43.8 |
% |
|
|
Disposal |
|
|
71,637 |
|
|
|
26.5 |
% |
|
|
71,831 |
|
|
27.6 |
% |
|
|
Power generation |
|
|
3,167 |
|
|
|
1.2 |
% |
|
|
3,612 |
|
|
1.4 |
% |
|
|
Processing |
|
|
2,720 |
|
|
|
1.0 |
% |
|
|
2,785 |
|
|
1.0 |
% |
|
|
Solid waste
operations |
|
|
199,060 |
|
|
|
73.7 |
% |
|
|
192,190 |
|
|
73.8 |
% |
|
|
Organics |
|
|
21,106 |
|
|
|
7.8 |
% |
|
|
19,867 |
|
|
7.6 |
% |
|
|
Customer solutions |
|
|
26,483 |
|
|
|
9.8 |
% |
|
|
26,479 |
|
|
10.2 |
% |
|
|
Recycling |
|
|
23,454 |
|
|
|
8.7 |
% |
|
|
21,756 |
|
|
8.4 |
% |
|
|
Total
revenues |
|
$ |
270,103 |
|
|
|
100.0 |
% |
|
$ |
260,292 |
|
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Components of revenue growth for the three months
ended June 30, 2016 compared to the three months ended June 30,
2015 are as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount |
|
% of Related Business |
|
% of Solid Waste Operations |
% of Total Company |
|
|
Solid Waste
Operations: |
|
|
|
|
|
|
|
|
|
Collection |
|
$ |
2,921 |
|
|
|
4.8 |
% |
|
|
2.7 |
% |
|
2.0 |
% |
|
|
Disposal |
|
|
830 |
|
|
|
1.9 |
% |
|
|
0.8 |
% |
|
0.6 |
% |
|
|
Solid Waste Price |
|
|
3,751 |
|
|
|
|
|
3.5 |
% |
|
2.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Collection |
|
|
302 |
|
|
|
|
|
0.3 |
% |
|
0.2 |
% |
|
|
Disposal |
|
|
(6,293 |
) |
|
|
|
|
-5.8 |
% |
|
-4.4 |
% |
|
|
Processing |
|
|
16 |
|
|
|
|
|
0.0 |
% |
|
0.0 |
% |
|
|
Solid Waste Volume |
|
|
(5,975 |
) |
|
|
|
|
-5.5 |
% |
|
-4.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Fuel surcharge |
|
|
(35 |
) |
|
|
|
|
0.0 |
% |
|
0.0 |
% |
|
|
Commodity price &
volume |
|
|
(32 |
) |
|
|
|
|
0.0 |
% |
|
0.0 |
% |
|
|
Acquisitions, net
divestitures |
|
|
638 |
|
|
|
|
|
0.5 |
% |
|
0.4 |
% |
|
|
Total Solid
Waste |
|
|
(1,653 |
) |
|
|
|
|
-1.5 |
% |
|
-1.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Organics |
|
|
1,324 |
|
|
|
|
|
|
1.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Customer
Solutions |
|
|
(69 |
) |
|
|
|
|
|
0.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Recycling
Operations: |
|
|
|
|
|
% of Recycling Operations |
|
|
|
Price |
|
|
1,103 |
|
|
|
|
|
9.6 |
% |
|
0.7 |
% |
|
|
Volume |
|
|
251 |
|
|
|
|
|
2.2 |
% |
|
0.2 |
% |
|
|
Total
Recycling |
|
|
1,354 |
|
|
|
|
|
11.8 |
% |
|
0.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Total
Company |
|
$ |
956 |
|
|
|
|
|
|
0.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Solid Waste Internalization Rates by Region for the
three and six months ended June 30, 2016 and 2015 are as
follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
|
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
2015 |
|
|
|
Eastern region |
|
|
53.0 |
% |
|
|
48.1 |
% |
|
|
49.2 |
% |
|
46.5 |
% |
|
|
Western region |
|
|
75.6 |
% |
|
|
74.0 |
% |
|
|
74.3 |
% |
|
73.0 |
% |
|
|
Solid waste
internalization |
|
|
63.7 |
% |
|
|
60.4 |
% |
|
|
60.9 |
% |
|
59.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Components of Capital Expenditures for the three and
six months ended June 30, 2016 and 2015 are as follows
(iv): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
|
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
2015 |
|
|
|
Total Growth
Capital Expenditures |
|
$ |
2,116 |
|
|
$ |
1,711 |
|
|
$ |
3,462 |
|
$ |
2,449 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Replacement Capital Expenditures: |
|
|
|
|
|
|
|
|
|
Landfill development |
|
$ |
7,670 |
|
|
$ |
4,380 |
|
|
$ |
11,457 |
|
$ |
5,618 |
|
|
|
Vehicles, machinery, equipment and
containers |
|
|
3,150 |
|
|
|
4,994 |
|
|
|
7,344 |
|
|
6,707 |
|
|
|
Landfill construction &
equipment |
|
|
|
|
|
|
- |
|
|
|
|
Facilities |
|
|
526 |
|
|
|
334 |
|
|
|
680 |
|
|
503 |
|
|
|
Other |
|
|
150 |
|
|
|
448 |
|
|
|
517 |
|
|
1,034 |
|
|
|
Total
Replacement Capital Expenditures |
$ |
11,496 |
|
|
$ |
10,156 |
|
|
$ |
19,998 |
|
$ |
13,862 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Growth and Replacement Capital
Expenditures |
$ |
13,612 |
|
|
$ |
11,867 |
|
|
$ |
23,460 |
|
$ |
16,311 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(iv) Our capital expenditures are broadly defined as
pertaining to either growth, replacement 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 adding infrastructure to increase throughput at
transfer stations and recycling facilities. Replacement 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, which are not included in the
table above, are defined as costs of equipment added directly as a
result of new business growth related to an acquisition. |
|
|
|
|
|
|
|
|
|
|
|
Investors:
Ned Coletta
Chief Financial Officer
(802) 772-2239
Media:
Joseph Fusco
Vice President
(802) 772-2247
http://www.casella.com
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