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Exhibit 99.1

FOR IMMEDIATE RELEASE

CASELLA WASTE SYSTEMS, INC. ANNOUNCES FOURTH QUARTER AND FISCAL YEAR 2014 RESULTS; AND PROVIDES GUIDANCE

Company also says it will change its fiscal year-end from April 30th to December 31st to better align its business cycle to its fiscal year.

RUTLAND, VERMONT (June 25, 2013) — Casella Waste Systems, Inc. (NASDAQ: CWST), a regional solid waste, recycling and resource management services company, today reported financial results for the quarter and fiscal year ended April 30, 2014. The company also announced its plan to change to a December 31st fiscal year-end, and shared guidance for the 8-month transition period ending December 31, 2014, and its 12-month fiscal year ending December 31, 2015.

Fourth Quarter and Fiscal Year 2014 Financial Highlights

 

    Revenue growth for the current quarter was $10.2 million, or 9.4 percent, from the same quarter last year. For fiscal year 2014, revenue growth was $42.3 million, or 9.3 percent, from the same period last year.

 

    Overall solid waste pricing growth for the fourth quarter was 0.5 percent, primarily driven by positive collection pricing growth of 1.5 percent as a percentage of collection revenues.

 

    Adjusted EBITDA* was $19.0 million for the current quarter, down $0.4 million from the same quarter last year. For fiscal year 2014, Adjusted EBITDA was $95.1 million, up $7.3 million from the same period last year.

 

    Free Cash Flow* for fiscal year 2014, was $1.3 million, up $13.5 million from the same period last year.

“We made excellent progress against our long-term goals during the fiscal year,” said John W. Casella, chairman and CEO of Casella Waste Systems, said. “We delivered on each of our major strategic priorities – getting additional volumes into our landfills, improving collection route profitability, furthering our long-term Eastern region strategy to improve our business positioning and margins, and driving high-return revenue growth through our customer solutions offerings. As a result, Adjusted EBITDA and Free Cash flow were both up significantly year-over-year.”

“While we’re happy with our progress, we still have quite a bit of work to do as a team over the next few years to drive higher cash flows and returns for our investors,” Casella said.

For the current quarter, revenues were $118.9 million, up $10.2 million, or 9.4 percent, from the same quarter last year, with revenue growth mainly driven by higher solid waste volumes, higher solid waste collection pricing, customer solutions growth, and acquisition activity. Overall solid waste pricing growth of 0.5 percent was primarily driven by residential and commercial pricing growth of 2.2 percent as a percentage of segment revenues.

Operating loss was ($6.0) million for the current quarter, compared to operating income of $2.1 million from the same quarter last year. The current quarter includes a $7.5 million non-cash asset impairment charge related to the shutdown of the C.A.R.E.S water treatment facility in early May 2014, $0.4 million of severance and reorganization costs, and a $1.1 million non-cash gain on the settlement of contingent consideration related to the acquisition of an industrial services company in September 2013.

By comparison, the quarter ended April 30, 2013, included $0.2 million of severance and reorganization costs related to the sale of the Maine Energy Recovery Company, LP facility and other realignment activities, $0.4 million of expenses related to the divestiture of Maine Energy and the acquisition of Bestway Disposal Services and Blow Brothers Inc, $0.7 million of legal expenses related to the settlement of the New York State income tax matter, and a $0.4 million reversal of a previously estimated loss on the divestiture of Maine Energy.

 

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Excluding these charges, Adjusted Operating Income* in the current quarter was $0.8 million, down $2.3 million from same quarter last year.

The company’s net loss attributable to common stockholders was ($11.8) million, or ($0.30) per share for the current quarter, compared to ($13.4) million, or ($0.34) per share for the same quarter last year. In addition to the unusual items identified above, the quarter last year included a $3.7 million loss from discontinued operations related to the disposal of the company’s only construction and demolition processing business.

For fiscal year 2014, revenues were $497.6 million, up $42.3 million, or 9.3 percent, from the same period last year. Operating income was $11.9 million for fiscal year 2014, down $0.5 million from the same period last year. Adjusted Operating Income* was $20.8 million for fiscal year 2014, up $2.6 million from the same period last year. The company’s net loss attributable to common stockholders was ($23.1) million, or ($0.58) per share for fiscal year 2014, compared to ($54.1) million, or ($1.59) per share for the same period last year. Adjusted EBITDA* was $95.1 million for fiscal year 2014, up $7.3 million from the same period last year.

Company Plans to Change Fiscal Year to Calendar Year End

“We got off to a great start in the first seven months of fiscal year 2014, but experienced challenging operating conditions due to severe winter weather in our third and fourth quarters,” Casella said. “An extended winter, and subsequently delayed spring, pushed our seasonal upswing into mid-April, and caused several jobs to move into next fiscal year.”

“The challenges we had this winter, and the unpredictability of our seasonal upswing, illuminated the need for us to adjust our fiscal year to better align it with our business cycle,” Casella said. “Putting our seasonally weak period at the beginning of our fiscal year gives us flexibility to better manage our business in a number of areas from costs to capital expenditures, and allows us more runway to make adjustments through the fiscal year.”

The company said that it is implementing a plan to change its fiscal year end from April 30th to December 31st, effective January 1, 2015. Under this change, the company will report an 8-month transition period ending December 31, 2014, and then subsequently its full fiscal year ending December 31, 2015. During the 8-month transition period, the company will report for the quarters ending July 31, 2014 and October 31, 2014.

Outlook

“Our plan for the 8-month transition period and the 12 months ended December 31, 2015, assumes that economic activity in the northeast remains flat, with limited GDP growth, and no major market changes.”

The company provided guidance for its 8-month transition period, which began May 1, 2014 and ends on December 31, 2014, by estimating results in the following ranges:

 

    Revenues between $356.0 million and $366.0 million (representing growth of 4.7 percent to 7.6 percent), as compared to $340.1 million for the 8-month period ended December 31, 2013;

 

    Adjusted EBITDA* between $71.0.0 million and $75.0 million, as compared to $72.1 million for the 8-month period ended December 31, 2013;

 

    Capital Expenditures of approximately $50.0 million (including roughly $13.0 million of capital associated with new contracts and infrastructure development), payments on operating leases of roughly $5.0 million, and capping, closure and environmental remediation payments of roughly $9.0 million.

 

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The company provided the following assumptions that are built into its 8 month transition period outlook:

 

    No material changes in the regional economy from fiscal year 2014.

 

    In the solid waste business, revenue growth of between 3.0 percent and 5.0 percent, with price growth from 1.0 percent to 2.0 percent; volumes growth from 1.0 percent to 2.0 percent; and the roll-over impact of acquisitions contributing roughly 1.0 percent. We are estimating that landfill volumes increase by approximately 150,000 tons.

 

    In the recycling business, overall revenue declines of between 2.5 percent and 7.5 percent, driven by lower commodity price and volumes.

 

    In the Other segment, revenue growth of between 20.0 percent and 25.0 percent, principally due to growth in the Customer Solutions group.

 

    No acquisitions beyond the above-mentioned roll-over impact of the acquisitions completed during fiscal year 2014 are included.

In addition, the company provided guidance for its next full fiscal year, which will run from January 1, 2015 through December 31, 2015, by estimating results in the following ranges:

 

    Revenues between $520.0 million and $530.0 million;

 

    Adjusted EBITDA* between $103.0 million and $107.0 million; and

 

    Free Cash Flow* between $14.0 million and $18.0 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 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, 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 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, 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 (excluding acquisition related capital expenditures), 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 statement and cash flow statement measures, affords investors the benefit of viewing its performance

 

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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 Thursday, June 26, 2014 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 60192807) until 11:59 p.m. ET on Thursday, July 3, 2014.

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: 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; 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; and we may incur environmental charges or asset impairments in the future. 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

(In thousands, except amounts per share)

 

     Three Months Ended     Fiscal Year Ended  
     April 30,     April 30,     April 30,     April 30,  
     2014     2013     2014     2013  
     (Unaudited)     (Unaudited)              

Revenues

   $ 118,927      $ 108,694      $ 497,633      $ 455,335   

Operating expenses:

        

Cost of operations

     88,028        78,147        354,592        323,014   

General and administration

     15,000        14,804        61,865        58,205   

Depreciation and amortization

     15,078        13,332        60,339        56,576   

Asset impairment charge

     7,455        —          7,455        —     

Severance and reorganization costs

     426        246        586        3,709   

Expense from divestiture, acquisition and financing costs

     18        408        144        1,410   

Environmental remediation charge

     —          —          400        —     

Development project charge

     (47     —          1,394        —     

Gain on settlement of acquisition related contingent consideration

     (1,058     —          (1,058     —     

Reversal of loss on divestiture

     —          (353     —          —     
  

 

 

   

 

 

   

 

 

   

 

 

 
     124,900        106,584        485,717        442,914   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating (loss) income

     (5,973     2,110        11,916        12,421   

Other expense/(income), net:

        

Interest expense, net

     9,523        9,081        37,863        41,429   

(Gain) loss from equity method investments

     (62     1,131        936        4,441   

Gain on sale of equity method investment

     —          —          (593     —     

Loss on derivative instruments

     72        640        280        4,512   

Loss on debt extinguishment

     —          —          —          15,584   

Other income

     (397     (298     (1,059     (1,036
  

 

 

   

 

 

   

 

 

   

 

 

 

Other expense, net

     9,136        10,554        37,427        64,930   
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss from continuing operations before income taxes and discontinued operations

     (15,109     (8,444     (25,511     (52,509

Provision (benefit) for income taxes

     524        1,373        1,799        (2,526
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss from continuing operations before discontinued operations

     (15,633     (9,817     (27,310     (49,983

Discontinued operations:

        

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

     —          (3,700     284        (4,480

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

     —          —          (378     —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss

     (15,633     (13,517     (27,404     (54,463
  

 

 

   

 

 

   

 

 

   

 

 

 

Less: Net loss attributable to noncontrolling interests

     (3,818     (120     (4,309     (321
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss attributable to common stockholders

   $ (11,815   $ (13,397   $ (23,095   $ (54,142
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average common shares outstanding

     39,916        39,515        39,820        34,015   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss per common share

   $ (0.30   $ (0.34   $ (0.58   $ (1.59
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA (2)

   $ 19,038      $ 19,355      $ 95,109      $ 87,842   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

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CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

 

     April 30,     April 30,  
     2014     2013  
ASSETS     

CURRENT ASSETS:

    

Cash and cash equivalents

   $ 2,464      $ 1,755   

Restricted cash

     76        76   

Accounts receivable - trade, net of allowance for doubtful accounts

     52,603        48,689   

Other current assets

     15,662        14,025   
  

 

 

   

 

 

 

Total current assets

     70,805        64,545   

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

     403,424        422,502   

Goodwill

     119,139        115,928   

Intangible assets, net

     13,420        11,674   

Restricted assets

     681        545   

Notes receivable - related party

     —          147   

Investments in unconsolidated entities

     16,752        20,252   

Other non-current assets

     25,676        27,526   
  

 

 

   

 

 

 

Total assets

   $ 649,897      $ 663,119   
  

 

 

   

 

 

 
LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY     

CURRENT LIABILITIES:

    

Current maturities of long-term debt and capital leases

   $ 885      $ 1,218   

Accounts payable

     51,788        51,974   

Other accrued liabilities

     37,073        34,906   
  

 

 

   

 

 

 

Total current liabilities

     89,746        88,098   

Long-term debt and capital leases, less current maturities

     507,134        494,987   

Other long-term liabilities

     61,554        64,583   

Total stockholders’ (deficit) equity

     (8,537     15,451   
  

 

 

   

 

 

 

Total liabilities and stockholders’ (deficit) equity

   $ 649,897      $ 663,119   
  

 

 

   

 

 

 

 

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CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

 

     Fiscal Year Ended  
     April 30,     April 30,  
     2014     2013  

Cash Flows from Operating Activities:

    

Net loss

   $ (27,404   $ (54,463

(Income) loss from discontinued operations, net

     (284     4,480   

Loss on disposal of discontinued operations, net

     378        —     

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

    

Gain on sale of property and equipment

     (840     (407

Depreciation and amortization

     60,339        56,576   

Depletion of landfill operating lease obligations

     9,948        9,372   

Interest accretion on landfill and environmental remediation liabilities

     3,985        3,675   

Asset impairment charge

     7,455        —     

Development project charge

     1,394        —     

Gain on settlement of acquisition related contingent consideration

     (1,058     —     

Amortization of discount on senior subordinated notes and second lien notes

     243        626   

Loss from equity method investments

     936        4,441   

Gain on sale of equity method investment

     (593     —     

Loss on derivative instruments

     280        4,512   

Loss on debt extinguishment

     —          15,584   

Stock-based compensation expense and related severance expense

     2,404        2,516   

Excess tax benefit on the vesting of share based awards

     —          (96

Deferred income taxes

     1,579        (3,543

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

     (9,120     633   
  

 

 

   

 

 

 

Net Cash Provided by Operating Activities

     49,642        43,906   
  

 

 

   

 

 

 

Cash Flows from Investing Activities:

    

Acquisitions, net of cash acquired

     (8,305     (25,225

Acquisition related additions to property, plant and equipment

     (2,633     (1,746

Additions to property, plant and equipment

     (43,326     (53,281

Payments on landfill operating lease contracts

     (6,505     (6,261

Payment for capital related to divestiture

     —          (618

Investments in unconsolidated entities

     (2,107     (3,207

Proceeds from sale of equity method investment

     3,442        —     

Proceeds from sale of property and equipment

     1,524        883   
  

 

 

   

 

 

 

Net Cash Used In Investing Activities

     (57,910     (89,455
  

 

 

   

 

 

 

Cash Flows from Financing Activities:

    

Proceeds from long-term borrowings

     161,650        376,346   

Principal payments on long-term debt

     (152,380     (360,858

Payment of tender premium and costs on second lien notes

     —          (10,743

Payments of financing costs

     (405     (4,609

Net proceeds from the sale of Class A common stock

     —          42,184   

Proceeds from the exercise of share based awards

     143        —     

Excess tax benefit on the vesting of share based awards

     —          96   

Contributions from noncontrolling interest holders

     —          2,531   
  

 

 

   

 

 

 

Net Cash Provided By Financing Activities

     9,008        44,947   
  

 

 

   

 

 

 

Net Cash Used In Discontinued Operations

     (31     (2,177
  

 

 

   

 

 

 

Net increase (decrease) in cash and cash equivalents

     709        (2,779

Cash and cash equivalents, beginning of period

     1,755        4,534   
  

 

 

   

 

 

 

Cash and cash equivalents, end of period

   $ 2,464      $ 1,755   
  

 

 

   

 

 

 

Supplemental Disclosures:

    

Cash interest

   $ 35,162      $ 41,348   

Cash income taxes, net of refunds

   $ 532      $ (253

Property, plant and equipment acquired through lease obligations

   $ 2,301      $ —     

 

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CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands)

 

Note 1: Discontinued Operations

In the fourth quarter of fiscal year 2013, we initiated a plan to dispose of KTI BioFuels, Inc. (“BioFuels”), a construction and demolition material processing facility located in Lewiston, Maine, and as a result, the assets associated with BioFuels 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 BioFuels, which was located in our Eastern region, to ReEnergy. We agreed to sell the BioFuels assets for undiscounted purchase consideration of $2,000, which is being 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.

The operating results of these operations, including those related to prior years, have been reclassified from continuing to discontinued operations in the accompanying consolidated financial statements. Revenues and loss before income taxes attributable to discontinued operations for fiscal year 2014, 2013 and 2012, respectively, are as follows:

 

     Fiscal Year Ended April 30,  
     2014      2013     2012  

Revenues

   $ 3,316       $ 12,033      $ 12,865   

Income (loss) before income taxes

   $ 284       $ (4,480   $ (1,025

 

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 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 settlement of acquisition related contingent consideration, 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 costs, expenses from divestiture, acquisition and financing costs, gains on settlement of acquisition related contingent consideration, 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 (excluding acquisition related capital expenditures), less payments on landfill operating leases, less assets acquired through financing leases, plus proceeds from the sale of property and equipment, plus contributions from noncontrolling 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.

 

4


Following is a reconciliation of Adjusted EBITDA and Adjusted Operating Income to Net Loss:

 

     Three Months Ended     Fiscal Year Ended  
     April 30,     April 30,     April 30,     April 30,  
     2014     2013     2014     2013  

Net Loss

   $ (15,633   $ (13,517   $ (27,404   $ (54,463

Loss (income) from discontinued operations, net

     —          3,700        (284     4,480   

Loss on disposal of discontinued operations, net

     —          —          378        —     

Provision (benefit) for income taxes

     524        1,373        1,799        (2,526

Other (income) expense, net

     (387     1,473        (436     23,501   

Interest expense, net

     9,523        9,081        37,863        41,429   

Expense from divestiture, acquisition and financing costs

     18        408        144        1,410   

Depreciation and amortization

     15,078        13,332        60,339        56,576   

Severance and reorganization costs

     426        246        586        3,709   

Tax settlement costs

     —          679        —          679   

Environmental remediation charge

     —          —          400        —     

Reversal of loss on divestiture

     —          (353     —          —     

Asset impairment charge

     7,455        —          7,455        —     

Gain on settlement of acquisition related contingent consideration

     (1,058     —          (1,058     —     

Development project charge

     (47     —          1,394        —     

Depletion of landfill operating lease obligations

     2,238        2,014        9,948        9,372   

Interest accretion on landfill and environmental remediation liabilities

     901        919        3,985        3,675   
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA (2)

   $ 19,038      $ 19,355      $ 95,109      $ 87,842   

Depreciation and amortization

     (15,078     (13,332     (60,339     (56,576

Depletion of landfill operating lease obligations

     (2,238     (2,014     (9,948     (9,372

Interest accretion on landfill and environmental remediation liabilities

     (901     (919     (3,985     (3,675
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted Operating Income (2)

   $ 821      $ 3,090      $ 20,837      $ 18,219   
  

 

 

   

 

 

   

 

 

   

 

 

 

Following is a reconciliation of Free Cash Flow to Net Cash Provided by Operating Activities:

 

     Three Months Ended     Fiscal Year Ended  
     April 30,     April 30,     April 30,     April 30,  
     2014     2013     2014     2013  

Net Cash Provided by Operating Activities

   $ 11,964      $ 12,735      $ 49,642      $ 43,906   

Capital expenditures

     (9,095     (10,493     (43,326     (53,281

Payments on landfill operating lease contracts

     (453     (535     (6,505     (6,261

Proceeds from sale of property and equipment

     276        102        1,524        883   

Contributions from noncontrolling interest holders

     —          1,336        —          2,531   
  

 

 

   

 

 

   

 

 

   

 

 

 

Free Cash Flow (2)

   $ 2,692      $ 3,145      $ 1,335      $ (12,222
  

 

 

   

 

 

   

 

 

   

 

 

 

 

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 twelve months ended April 30, 2014 and 2013 are as follows:

 

     Three Months Ended April 30,  
     2014      % of Total
Revenue
    2013      % of Total
Revenue
 

Collection

   $ 53,921         45.3   $ 51,848         47.7

Disposal

     27,374         23.0     24,481         22.5

Power generation

     2,699         2.3     2,498         2.3

Processing

     1,683         1.4     1,751         1.6
  

 

 

    

 

 

   

 

 

    

 

 

 

Solid waste operations

     85,677         72.0     80,578         74.1

Organics

     9,701         8.2     9,358         8.6

Customer solutions

     12,574         10.6     8,159         7.5

Recycling

     10,975         9.2     10,599         9.8
  

 

 

    

 

 

   

 

 

    

 

 

 

Total revenues

   $ 118,927         100.0   $ 108,694         100.0
  

 

 

    

 

 

   

 

 

    

 

 

 
     Fiscal Year Ended April 30,  
     2014      % of Total
Revenue
    2013      % of Total
Revenue
 

Collection

   $ 225,441         45.3   $ 208,973         45.9

Disposal

     128,778         25.9     115,049         25.3

Power generation

     9,512         1.9     11,354         2.4

Processing

     8,852         1.8     6,901         1.5
  

 

 

    

 

 

   

 

 

    

 

 

 

Solid waste operations

     372,583         74.9     342,277         75.1

Organics

     37,829         7.6     35,330         7.8

Customer solutions

     43,396         8.7     35,455         7.8

Recycling

     43,825         8.8     42,273         9.3
  

 

 

    

 

 

   

 

 

    

 

 

 

Total revenues

   $ 497,633         100.0   $ 455,335         100.0
  

 

 

    

 

 

   

 

 

    

 

 

 

Components of revenue growth for the three months ended April 30, 2014 compared to the three months ended April 30, 2013 are as follows:

 

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

Solid Waste Operations:

        

Collection

   $ 787        1.5     1.0     0.7

Disposal

     (358     -1.5     -0.5     -0.3
  

 

 

     

 

 

   

 

 

 

Solid Waste Yield

     429          0.5     0.4

Collection

     758          0.9     0.7

Disposal

     2,226          2.8     2.1

Processing

     139          0.2     0.1
  

 

 

     

 

 

   

 

 

 

Solid Waste Volume

     3,123          3.9     2.9

Fuel surcharge

     (19       0.0     0.0

Commodity price & volume

     13          0.0     0.0

Acquisitions, net divestitures

     1,554          1.9     1.4
  

 

 

     

 

 

   

 

 

 

Total Solid Waste

     5,099          6.3     4.7
  

 

 

     

 

 

   

 

 

 

Organics

     343            0.3
  

 

 

       

 

 

 

Customer Solutions

     4,415            4.1
  

 

 

       

 

 

 
                 % of Recycling
Operations
       

Recycling Operations:

        

Commodity price

     34          0.3     0.0

Commodity volume

     33          0.4     0.0

Commodity acquisition

     309          2.9     0.3
  

 

 

     

 

 

   

 

 

 

Total Recycling

     376          3.6     0.3
  

 

 

     

 

 

   

 

 

 

Total Company

   $ 10,233            9.4
  

 

 

       

 

 

 

Solid Waste Internalization Rates by Region:

 

     Three Months Ended April 30,     Fiscal Year Ended April 30,  
     2014     2013     2014     2013  

Eastern region

     51.6     55.8     52.1     54.3

Western region

     76.2     72.5     75.2     73.3

Solid waste internalization

     63.6     64.2     63.6     64.5


CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES

SUPPLEMENTAL DATA TABLES

(Unaudited)

(In thousands)

Components of Capital Expenditures (1):

 

     Three Months Ended April 30,      Fiscal Year Ended April 30,  
     2014      2013      2014      2013  

Landfill development

   $ 4,171       $ 5,696       $ 21,252       $ 27,310   

Vehicles, machinery, equipment and containers

     4,057         2,513         17,353         13,938   

Facilities

     628         2,260         3,694         11,609   

Other

     239         24         1,027         424   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Capital Expenditures

     9,095         10,493         43,326         53,281   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(1) Does not include acquisition related capital expenditures, which are defined as costs of equipment added directly as a result of new business growth related to an acquisition.