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8-K - 8-K - CASELLA WASTE SYSTEMS INCd636279d8k.htm

Exhibit 99.1

FOR IMMEDIATE RELEASE

CASELLA WASTE SYSTEMS, INC. ANNOUNCES SECOND QUARTER FISCAL YEAR 2014 RESULTS; AND REVISES FISCAL YEAR 2014 GUIDANCE UPWARD

RUTLAND, VERMONT (December 5, 2013) - 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 2014, and revised its guidance for its fiscal year 2014.

Highlights for the quarter included:

 

    Revenue growth of $15.5 million, or 13.2 percent, from the same quarter last year.

 

    Adjusted EBITDA* was $29.2 million for the quarter, up $4.8 million, or 19.8 percent, from the same quarter last year.

 

    Adjusted Operating Income* was $9.7 million for the quarter, up $3.4 million, or 53.4 percent, from the same quarter last year.

 

    Revenue and Adjusted EBITDA guidance is revised upward for fiscal year 2014; the second upward revision this fiscal year.

For the quarter ended October 31, 2013, revenues were $132.3 million, up $15.5 million, or 13.2 percent, from the same quarter last year, with revenue growth mainly driven by higher disposal volumes, acquisition activity, and higher solid waste collection pricing. Overall solid waste pricing growth of 1.0 percent was primarily driven by residential and commercial pricing growth of 1.7 percent as a percentage of segment revenues.

The company’s net loss attributable to common stockholders was ($0.3) million, or ($0.01) per share for the quarter, compared to ($21.0) million, or ($0.68) per share for the same quarter last year.

Operating income was $9.5 million for the quarter, up $5.0 million from the same quarter last year. The current quarter includes a $0.2 million environmental remediation charge and a $0.1 million severance and reorganization charge related to general realignment activities, whereas, the quarter ended October 31, 2012 included a $1.8 million severance and reorganization charge and a $0.1 million expense related to divestiture, acquisition and financing costs.

Excluding these charges, Adjusted Operating Income* in the current quarter was $9.7 million, up $3.4 million from same quarter last year. Adjusted EBITDA was $29.2 million for the quarter, up $4.8 million from the same quarter last year.

“We continued to make excellent progress through our second quarter, with results primarily driven by continued execution in key areas of management focus - sourcing incremental landfill volumes; improving collection route profitability; and successfully executing the multi-year Eastern region strategy,” said John W. Casella, chairman and CEO of Casella Waste Systems.

“Landfill volumes were up 122,000 tons from the same quarter last year, or up 298,000 tons year-to-date, excluding volumes from the Worcester landfill closure project,” Casella said. “This improvement was driven by enhanced sales efforts in Western New York, ramping of tonnages to the Southbridge landfill, the integration of the BBI acquisition, and a tightening disposal market in Vermont and New Hampshire due to competitor site closures. We continued to experience these same positive landfill tonnage trends into November.”

Six Months Financial Results

Highlights for the six months ended October 31, 2013 included:

 

    Revenue growth of $26.4 million, or 11.3 percent, from the same period last year.

 

    Adjusted EBITDA* was $57.9 million for the six-month period, up $9.2 million, or 19.0 percent, from the same period last year.

 

    Adjusted Operating Income* was $19.5 million for the six-month period, up $6.8 million, or 53.8 percent, from the same period last year.

 

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For the six months ended October 31, 2013, revenues were $260.9 million, up $26.4 million, or 11.3 percent, from the same period last year. Operating income was $19.2 million for the six month period, up $9.0 million from the same period last year. The company’s net loss attributable to common stockholders was ($0.5) million, or ($0.01) per common share for the six month period, compared to ($29.3) million, or ($1.01) per share for the same period last year.

Fiscal 2014 Outlook

“After a solid first two quarters and better visibility into the remainder of our fiscal year, we have revised our fiscal year 2014 guidance for revenues, Adjusted EBITDA and capital expenditures,” Casella said. “This revision is based on a consistent framework for all assumptions outside of our direct control, such as new landfill volumes or economic growth. Free cash flow guidance remains unchanged due to higher capital expenditures at the landfills on higher than expected volumes.”

The company updated guidance for the fiscal year ending April 30, 2014, by estimating results in the following ranges:

 

    Revenues between $480.0 million and $490.0 million (increased from a range of $470.0 million to $480.0 million);

 

    Adjusted EBITDA* between $95.0 million and $98.0 million (increased from a range of $92.0 million and $96.0 million).

 

    Capital Expenditures of between $44.0 million and $47.0 million (refined from a range of $42.0 million to $46.0 million).

*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, tax settlement costs, bargain purchase gains, asset impairment charges, environmental remediation charges, severance and reorganization charges, expenses from divestiture, acquisition and financing costs, as well as losses on divestiture (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-offs, legal settlement charges, tax settlement costs, bargain purchase gains, asset impairment charges, environmental remediation charges, severance and reorganization charges, expenses from divestiture, acquisition and financing costs, as well as losses on divestiture (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 holders, 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

 

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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, 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.

Conference call to discuss quarter

The Company will host a conference call to discuss these results on Friday, December 6, 2013 at 10:00 a.m. ET. Individuals interested in participating in the call should dial (877) 548-9590 or (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 11195212) until 11:59 p.m. ET on Friday, December 13, 2013.

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 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; 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 not fully recognize the expected financial benefits from the BBI acquisition due to the an inability to recognize operational cost savings, general and administration cost savings, or landfill or recycling facility internalization benefits. 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, 2013.

 

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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.

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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CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except for per share data)

 

     Three Months Ended     Six Months Ended  
     October 31,
2013
    October 31,
2012
    October 31,
2013
    October 31,
2012
 

Revenues

   $ 132,296      $ 116,836      $ 260,854      $ 234,474   

Operating expenses:

        

Cost of operations

     90,545        82,087        178,962        163,432   

General and administration

     16,425        13,883        31,503        29,073   

Depreciation and amortization

     15,669        14,570        30,866        29,279   

Environmental remediation charge

     150        —          150        —     

Severance and reorganization costs

     53        1,793        161        1,827   

Expense from divestiture, acquisition and financing costs

     4        77        24        631   
  

 

 

   

 

 

   

 

 

   

 

 

 
     122,846        112,410        241,666        224,242   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

     9,450        4,426        19,188        10,232   

Other expense/(income):

        

Interest expense, net

     9,534        11,506        18,881        23,189   

(Income) loss from equity method investments

     (91     109        887        1,875   

Loss (gain) on derivative instruments

     629        3,896        (25     3,896   

Loss on debt extinguishment

     —          9,670        —          9,670   

Other income

     (392     (311     (530     (441
  

 

 

   

 

 

   

 

 

   

 

 

 

Other expense, net

     9,680        24,870        19,213        38,189   
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss from continuing operations before income taxes and discontinued operations

     (230     (20,444     (25     (27,957

Provision for income taxes

     300        413        619        1,063   
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss from continuing operations before discontinued operations

     (530     (20,857     (644     (29,020

Discontinued operations:

        

(Loss) income from discontinued operations, net of income taxes (1)

     (45     (235     284        (451

Loss on disposal of discontinued operations, net of income taxes (1)

     —          —          (378     —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss

     (575     (21,092     (738     (29,471
  

 

 

   

 

 

   

 

 

   

 

 

 

Less: Net loss attributable to noncontrolling interests

     (236     (125     (207     (133
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss attributable to common stockholders

   $ (339   $ (20,967   $ (531   $ (29,338
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average common shares outstanding

     39,821        30,872        39,742        28,932   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss per common share

   $ (0.01   $ (0.68   $ (0.01   $ (1.01
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA (2)

   $ 29,212      $ 24,382      $ 57,947      $ 48,706   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

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CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

 

     October 31,
2013
     April 30,
2013
 
     (Unaudited)         
ASSETS      

CURRENT ASSETS:

     

Cash and cash equivalents

   $ 4,953       $ 1,755   

Restricted cash

     76         76   

Accounts receivable - trade, net of allowance for doubtful accounts

     54,275         48,689   

Other current assets

     17,137         14,025   
  

 

 

    

 

 

 

Total current assets

     76,441         64,545   

Property, plant and equipment, net of accumulated depreciation and amortization

     422,407         422,502   

Goodwill

     118,257         115,928   

Intangible assets, net

     12,430         11,674   

Restricted assets

     645         545   

Notes receivable - related party

     149         147   

Investments in unconsolidated entities

     19,217         20,252   

Other non-current assets

     28,967         27,526   
  

 

 

    

 

 

 

Total assets

   $ 678,513       $ 663,119   
  

 

 

    

 

 

 
LIABILITIES AND STOCKHOLDERS’ EQUITY      

CURRENT LIABILITIES:

     

Current maturities of long-term debt and capital leases

   $ 430       $ 857   

Current maturities of financing lease obligations

     374         361   

Accounts payable

     49,542         51,974   

Other accrued liabilities

     39,234         34,906   
  

 

 

    

 

 

 

Total current liabilities

     89,580         88,098   

Long-term debt and capital leases, less current maturities

     507,159         493,531   

Financing lease obligations, less current maturities

     1,266         1,456   

Other long-term liabilities

     64,668         64,583   

Total stockholders’ equity

     15,840         15,451   
  

 

 

    

 

 

 

Total liabilities and stockholders’ equity

   $ 678,513       $ 663,119   
  

 

 

    

 

 

 

 

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CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

 

     Six Months Ended  
     October 31,
2013
    October 31,
2012
 

Cash Flows from Operating Activities:

    

Net loss

   $ (738   $ (29,471

Adjustments to reconcile net loss to net cash provided by operating activities:

    

(Income) loss from discontinued operations, net

     (284     451   

Loss on disposal of discontinued operations, net

     378        —     

Gain on sale of property and equipment

     (389     (209

Depreciation and amortization

     30,866        29,279   

Depletion of landfill operating lease obligations

     5,491        4,878   

Interest accretion on landfill and environmental remediation liabilities

     2,068        1,858   

Amortization of discount on second lien notes and senior subordinated notes

     119        502   

Loss from equity method investments

     887        1,875   

(Gain) loss on derivative instruments

     (25     3,896   

Loss on debt extinguishment

     —          9,670   

Stock-based compensation

     1,209        1,306   

Excess tax benefit on the vesting of share based awards

     —          (188

Deferred income taxes

     504        907   

Changes in assets and liabilities, net of effects of acquisitions and divestitures

     (11,967     (1,986
    

 

 

   

 

 

 

Net Cash Provided by Operating Activities

     28,119        22,768   
    

 

 

   

 

 

 

Cash Flows from Investing Activities:

    

Acquisitions, net of cash acquired

     (2,822     (4,635

Additions to property, plant and equipment

 

- acquisition

     (1,365     (417
 

- growth

     (3,249     (8,198
 

- maintenance

     (22,810     (24,776

Payments on landfill operating lease contracts

     (3,471     (3,298

Payment for capital related to divestiture

     —          (618

Investments in unconsolidated entities

     (2,148     (1,000

Proceeds from sale of property and equipment

     929        543   
    

 

 

   

 

 

 

Net Cash Used In Investing Activities

     (34,936     (42,399
    

 

 

   

 

 

 

Cash Flows from Financing Activities:

    

Proceeds from long-term borrowings

     83,190        236,177   

Principal payments on long-term debt

     (72,586     (227,028

Change in restricted cash

     —          (23,579

Payment of tender premium and costs on second lien notes

     —          (6,745

Payments of financing costs

     (388     (4,329

Net proceeds from the sale of Class A common stock

     —          42,149   

Excess tax benefit on the vesting of share based awards

     —          188   

Contributions from noncontrolling interest holders

     —          1,195   
    

 

 

   

 

 

 

Net Cash Provided By Financing Activities

     10,216        18,028   
    

 

 

   

 

 

 

Net Cash Used In Discontinued Operations

     (201     (1,030
    

 

 

   

 

 

 

Net increase (decrease) in cash and cash equivalents

     3,198        (2,633

Cash and cash equivalents, beginning of period

     1,755        4,534   
    

 

 

   

 

 

 

Cash and cash equivalents, end of period

   $ 4,953      $ 1,901   
    

 

 

   

 

 

 

Supplemental Disclosures:

    

Cash interest

   $ 17,577      $ 22,234   

Cash income tax payments, net

   $ 622      $ 71   

 

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CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(In thousands)

 

Note 1: Divestiture and Discontinued Operations

Maine Energy Divestiture

In the first quarter of fiscal year 2013, we executed a purchase and sale agreement with the City of Biddeford, Maine, pursuant to which we agreed to sell the real property of Maine Energy Recovery Company LP (“Maine Energy”), which is located 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 will be paid to us in equal installments over the next 21 years, subject to the terms of the purchase and sale agreement. The transaction closed in November 2012, and we waived certain conditions precedent not satisfied at that time. In December 2012, we closed the Maine Energy facility and initiated the decommissioning process in accordance with the provisions of the agreement. Following the decommissioning of the Maine Energy facility, 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. Demolition is nearly complete, pending final approval of work plans by the United States Environmental Protection Agency, and the time for completion has been consensually extended by Maine Energy and the City of Biddeford. We will continue to finalize estimates and obtain additional information regarding the estimated costs associated with the divestiture. Due to the inherent judgments and estimates regarding the remaining costs to fulfill our obligation under the purchase and sale agreement to demolish the facility and remediate the site, recognition of a loss on divestiture, which we do not expect, or a potential gain on divestiture is possible.

As a part of the closure and decommissioning of the Maine Energy facility, we have withdrawn from a multiemployer pension plan to which we have made contributions for the benefit of Maine Energy employees covered under a collective bargaining agreement. We have a potential liability associated with our withdrawal from the multiemployer pension plan based on the value of the plan’s unfunded vested benefits. In accordance with FASB ASC 715-80, in a situation with unfunded vested benefits, a liability is not recorded by a participating employer as no single employer has an identifiable share of the actuarial obligation of the multiemployer pension plan.

Discontinued Operations

In the fourth quarter of fiscal year 2013, we initiated a plan to dispose of KTI Bio Fuels, Inc. (“Bio Fuels”), a construction and demolition material processing facility located in Lewiston, Maine, and as a result, the assets associated with Bio Fuels were classified as held-for-sale and the results of operations were recorded as loss from discontinued operations. Assets of the disposal group previously classified as held-for-sale, and included in discontinued operations as of April 30, 2013, include certain inventory along with plant and equipment. In the first quarter of fiscal year 2014, we executed a purchase and sale agreement with ReEnergy Lewiston LLC (“ReEnergy”), pursuant to which we agreed to sell certain assets of Bio Fuels, which is located in our Eastern region, to ReEnergy. We agreed to sell the Bio Fuels assets for undiscounted purchase consideration of $2,000, which will be paid to us in equal quarterly installments over five years commencing November 1, 2013, subject to the terms of the purchase and sale agreement. We recognized a $378 loss on disposal of discontinued operations in the first quarter of fiscal year 2014 associated with the disposition. Revenues and (loss) income before income taxes attributable to discontinued operations for the three and six months ended October 31, 2013 and 2012, respectively, are as follows:

 

     Three Months Ended
October 31,
    Six Months Ended
October 31,
 
     2013     2012     2013      2012  

Revenues

   $ 5      $ 3,498      $ 3,316       $ 7,055   

(Loss) income before income taxes

   $ (45   $ (235   $ 284       $ (452

 

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, tax settlement costs, bargain purchase gains, asset impairment charges, environmental remediation charges, severance and reorganization charges, expenses from divestiture, acquisition and financing costs, as well as losses on divestiture (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, tax settlement costs, bargain purchase gains, asset impairment charges, environmental remediation charges, severance and reorganization charges, expenses from divestiture, acquisition and financing costs, as well as losses on divestiture (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 holders, 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.

 

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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,  
     2013     2012     2013     2012  

Net Loss

   $ (575   $ (21,092   $ (738   $ (29,471

Loss (income) from discontinued operations, net

     45        235        (284     451   

Loss on disposal of discontinued operations, net

     —          —          378        —     

Provision for income taxes

     300        413        619        1,063   

Other expense, net

     146        13,364        331        15,001   

Interest expense, net

     9,534        11,506        18,881        23,189   

Expense from divestiture, acquisition and financing costs

     4        77        24        631   

Depreciation and amortization

     15,669        14,570        30,866        29,279   

Severance and reorganization costs

     53        1,793        161        1,827   

Environmental remediation charge

     150        —          150        —     

Depletion of landfill operating lease obligations

     2,864        2,591        5,491        4,878   

Interest accretion on landfill and environmental remediation liabilities

     1,022        925        2,068        1,858   
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA (2)

   $ 29,212      $ 24,382      $ 57,947      $ 48,706   

Depreciation and amortization

     (15,669     (14,570     (30,866     (29,279

Depletion of landfill operating lease obligations

     (2,864     (2,591     (5,491     (4,878

Interest accretion on landfill and environmental remediation liabilities

     (1,022     (925     (2,068     (1,858
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted Operating Income (2)

   $ 9,657      $ 6,296      $ 19,522      $ 12,691   
  

 

 

   

 

 

   

 

 

   

 

 

 

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,  
     2013     2012     2013     2012  

Net Cash Provided by Operating Activities

   $ 8,593      $ 15,046      $ 28,119      $ 22,768   

Capital expenditures - growth and maintenance

     (12,652     (16,793     (26,059     (32,974

Payments on landfill operating lease contracts

     (1,489     (1,484     (3,471     (3,298

Proceeds from sale of property and equipment

     645        278        929        543   

Contributions from noncontrolling interest holders

     —          474        —          1,195   
  

 

 

   

 

 

   

 

 

   

 

 

 

Free Cash Flow (2)

   $ (4,903   $ (2,479   $ (482   $ (11,766
  

 

 

   

 

 

   

 

 

   

 

 

 

 

5


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, 2013 and 2012 are as follows:

 

     Three Months Ended October 31,  
     2013      % of Total
Revenue
    2012      % of Total
Revenue
 

Collection

   $ 58,932         44.5   $ 52,632         45.0

Disposal

     37,374         28.3     32,382         27.7

Power generation

     1,980         1.5     2,793         2.4

Processing

     2,512         1.9     1,604         1.4
  

 

 

    

 

 

   

 

 

    

 

 

 

Solid waste operations

     100,798         76.2     89,411         76.5

Organics

     9,474         7.2     8,394         7.2

Customer solutions

     10,518         8.0     9,221         7.9

Recycling

     11,506         8.7     9,810         8.4
  

 

 

    

 

 

   

 

 

    

 

 

 

Total revenues

   $ 132,296         100.0   $ 116,836         100.0
  

 

 

    

 

 

   

 

 

    

 

 

 
     Six Months Ended October 31,  
     2013      % of Total
Revenue
    2012      % of Total
Revenue
 

Collection

   $ 117,245         44.9   $ 105,665         45.1

Disposal

     72,497         27.8     63,349         27.0

Power generation

     4,022         1.5     5,456         2.3

Processing

     5,364         2.1     3,039         1.3
  

 

 

    

 

 

   

 

 

    

 

 

 

Solid waste operations

     199,128         76.3     177,509         75.7

Organics

     19,350         7.4     17,247         7.4

Customer solutions

     19,686         7.5     18,746         8.0

Recycling

     22,690         8.8     20,972         8.9
  

 

 

    

 

 

   

 

 

    

 

 

 

Total revenues

   $ 260,854         100.0   $ 234,474         100.0
  

 

 

    

 

 

   

 

 

    

 

 

 

Components of revenue growth for the three months ended October 31, 2013 compared to the three months ended October 31, 2012 are as follows:

 

     Amount     % of Related
Business
    % of Solid Waste
Operations
    % of Total
Company
 

Solid Waste Operations:

        

Collection

   $ 950        1.8     1.1     0.8

Disposal

     180        0.6     0.2     0.2
  

 

 

     

 

 

   

 

 

 

Solid Waste Yield

     1,130          1.3     1.0

Collection

     1,033          1.1     0.9

Disposal

     5,344          6.0     4.5

Processing

     99          0.1     0.1
  

 

 

     

 

 

   

 

 

 

Solid Waste Volume

     6,476          7.2     5.5

Fuel and oil recovery fee

     (95       -0.1     -0.1

Commodity price & volume

     187          0.2     0.2

Acquisitions, net divestitures

     3,689          4.1     3.2

Closed landfill

     —            0.0     0.0
  

 

 

     

 

 

   

 

 

 

Total Solid Waste

     11,387          12.7     9.8
  

 

 

     

 

 

   

 

 

 

Organics

     1,080            0.9
  

 

 

       

 

 

 

Customer Solutions

     1,297            1.1
  

 

 

       

 

 

 
                 % of Recycling
Operations
       

Recycling Operations:

        

Commodity price

     970          9.9     0.8

Commodity volume

     726          7.4     0.6
  

 

 

     

 

 

   

 

 

 

Total Recycling

     1,696          17.3     1.4
  

 

 

     

 

 

   

 

 

 

Total Company

   $ 15,460            13.2
  

 

 

       

 

 

 

Solid Waste Internalization Rates by Region:

 

     Three Months Ended October 31,     Six Months Ended October 31,  
     2013     2012     2013     2012  

Eastern region

     47.5     53.5     53.8     53.7

Western region

     74.4     74.2     74.4     73.4

Solid waste internalization

     61.8     65.0     64.3     64.5


CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES

SUPPLEMENTAL DATA TABLES

(Unaudited)

(In thousands)

GreenFiber Financial Statistics (1):

 

     Three Months Ended October 31,     Six Months Ended October 31,  
     2013     2012     2013     2012  

Revenues

   $ 20,840      $ 19,494      $ 35,570      $ 32,595   

Net income (loss)

     152        (297     (1,843     (3,866

Cash flow (used in) provided by operations

     (82     805        1,375        1,031   

Net working capital changes

     (1,757     (662     133        1,274   

Adjusted EBITDA

   $ 1,675      $ 1,467      $ 1,242      $ (243

As a percentage of revenues:

        

Net income (loss)

     0.7     -1.5     -5.2     -11.9

Adjusted EBITDA

     8.0     7.5     3.5     -0.7

 

(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 October 31,      Six Months Ended October 31,  
     2013      2012      2013      2012  

Growth capital expenditures:

           

Landfill development

   $ 54       $ 257       $ 54       $ 589   

Water treatment facility

     —           3,908         —           4,668   

Transfer station construction

     174         1,434         174         1,434   

Other

     1,236         597         3,021         1,507   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Growth Capital Expenditures

   $ 1,464       $ 6,196       $ 3,249       $ 8,198   
  

 

 

    

 

 

    

 

 

    

 

 

 

Maintenance capital expenditures:

           

Vehicles, machinery / equipment and containers

   $ 2,405       $ 2,925       $ 5,438       $ 5,814   

Landfill construction & equipment

     8,202         7,172         15,300         18,094   

Facilities

     467         367         1,698         595   

Other

     114         133         374         273   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Maintenance Capital Expenditures

   $ 11,188       $ 10,597       $ 22,810       $ 24,776   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Growth and Maintenance Capital Expenditures

   $ 12,652       $ 16,793       $ 26,059       $ 32,974   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(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.