Casella Waste Systems, Inc. (NASDAQ:CWST), a regional solid waste,
recycling and resource management services company, today reported
its results for the period ended December 31, 2015. The
company also provided guidance for its next fiscal year ending
December 31, 2016.
Highlights for the Three and Twelve
Months Ended December 31, 2015:
- Revenues were $140.0 million for the quarter, up $6.5
million, or 4.9%, from the same period in 2014. Revenues were
$546.5 million for the fiscal year, up $20.6 million, or 3.9%, from
the same period in 2014.
- Adjusted EBITDA* was $27.8 million for the quarter, up
$3.4 million, or 13.8%, from the same period in 2014.
Adjusted EBITDA was $106.1 million for the fiscal year, up $9.2
million, or 9.5%, from the same period in 2014.
- Adjusted Operating Income* for the quarter was $8.1
million, up $2.0 million, or 31.8%, from the same period in
2014. Adjusted Operating Income was $30.5 million for the
fiscal year, up $9.2 million, or 43.1%, from the same period in
2014.
- Free Cash Flow* for the quarter was $8.7 million, up
$10.2 million from the same period in 2014. Free Cash Flow
was $20.2 million for the fiscal year, up $29.9 million from the
same period in 2014.
- Overall solid waste pricing for the quarter was up
3.6%, mainly driven by strong residential and commercial collection
pricing up 5.6%.
“During fiscal year 2015, we continued to execute well against
our key strategies of increasing landfill returns, improving
collection route profitability, creating incremental value through
resource solutions, reducing financial and operational risks, and
improving our balance sheet,” said John W. Casella, Chairman and
CEO of Casella Waste Systems, Inc. “I am very pleased with
our financial and operational performance during the year, and I
believe that we are well positioned to continue to execute in
fiscal year 2016 and beyond.”
“We continued to expand Adjusted EBITDA margins in fiscal year
2015, up roughly 100 bps year-over-year, and we used the positive
free cash flow that we generated to repay debt,” Casella
said. “We repurchased and permanently retired $14.7 million
of our 7.75% Senior Subordinated Notes due 2019 during the last
half of the year, demonstrating our commitment to reduce leverage
and accelerate free cash flow generation by retiring our highest
cost debt. With our continued cash flow growth and debt
repayment, we reduced our consolidated leverage ratio as defined by
our ABL Revolver from 5.43x on March 31, 2015 to 4.75x on December
31, 2015.”
“From an operating standpoint, our solid waste pricing programs
continued to outpace inflation with overall solid waste pricing up
3.6% in the quarter, driven by strong residential and commercial
pricing, which were up 5.6%, and higher pricing in the disposal
line-of-business,” Casella said. “These strong pricing gains
were complemented by further improvements in our operating
efficiency programs with our fleet and routing programs driving
lower costs.”
“We have worked hard over the last year to reshape our recycling
sales model in the face of rapidly declining recycling commodity
prices, with the average commodity revenue per ton down 19% in
fiscal year 2015, resulting in a $8.8 million decline in recycling
commodity revenues,” Casella said. “We have offset this
decline in recycling commodity revenues through a combination of
our newly implemented Sustainability/Recycling Adjustment (“SRA”)
fee applied to residential and commercial hauling customers, lower
rebates or higher tipping fees to recycling processing customers,
and efforts to reduce operating costs at our materials processing
facilities. Through these efforts, we offset nearly all of
this commodity price headwind and held operating income flat in the
recycling line-of-business. This was a great achievement for
the team.”
For the quarter, revenues were $140.0 million, up $6.5 million,
or 4.9%, from the same period in 2014, with revenue growth mainly
driven by strong collection and disposal pricing and continued
growth in solid waste and recycling volumes, partially offset by
lower recycling commodity pricing, lower energy pricing and lower
processing volumes.
Adjusted EBITDA was $27.8 million for the quarter, up $3.4
million, or 13.8%, from the same period in 2014 mainly driven by
strong performance in the collection and disposal
lines-of-business. Strong performance in the collection
line-of-business was again driven by robust pricing and volume
growth, complemented by continued cost controls and operating
efficiency programs.
Operating income was $4.7 million for the quarter, down $1.0
million from the same period in 2014, whereas Adjusted Operating
Income was $8.1 million for the quarter, up $2.0 million from the
same period in 2014. Net loss attributable to common stockholders
was ($7.0) million, or ($0.17) per common share for the quarter,
compared to a net loss of ($6.4) million, or ($0.16) per common
share for the same period in 2014.
The quarter included $1.1 million of proxy contest costs, $0.3
million of severance and reorganization costs, a $1.9 million
contract settlement charge, a $0.1 million non-cash charge related
to divestiture transactions, a $0.1 million loss on debt
extinguishment, and a $1.8 million non-cash charge related to the
impairment of investments, while the same period in 2014 included a
$0.9 million environmental remediation charge, a $0.6 million
non-cash reversal of estimated costs reserved for site improvements
of a divested asset group, $0.2 million of fiscal year-end
transition costs, and a $2.3 million non-cash charge related to the
impairment of an investment.
Net cash provided by operating activities was $30.0 million in
the quarter, up $5.1 million from the same period in 2014, whereas
Free Cash Flow was $8.7 million in the quarter, up $10.2 million
from the same period in 2014.
For the fiscal year, revenues were $546.5 million, up $20.6
million, or 3.9%, from the same period in 2014, mainly driven by
strong collection pricing and higher disposal and recycling
volumes, partially offset by lower recycling commodity pricing,
lower energy pricing and lower processing volumes.
Adjusted EBITDA was $106.1 million for the fiscal year, up $9.2
million, or 9.5%, from the same period in 2014. Operating
income was $31.9 million for the fiscal year, up $19.7 million from
the same period in 2014, and Adjusted Operating Income was $30.5
million for the fiscal year, up $9.2 million from the same period
in 2014. Net loss attributable to common stockholders was
($13.0) million, or ($0.32) per common share for the fiscal year,
compared to ($25.4) million, or ($0.63) per share for the same
period in 2014.
Net cash provided by operating activities was $70.5 million in
the fiscal year, up $8.3 million from the same period in 2014,
whereas Free Cash Flow was $20.2 million in the fiscal year, up
$29.9 million from the same period in 2014. Normalized Free
Cash Flow* was $18.6 million in the fiscal year, up $9.3 million
from the same period in 2014.
2016 Outlook
“Our budget for fiscal year 2016 is on track with the multi-year
strategic and financial plan that we laid out for shareholders in
August 2015,” Casella said. “Our fiscal year 2016 budget
reflects continued execution of our key strategies and we remain
confident that execution in these areas will drive additional
shareholder value.”
The company provided guidance for its next fiscal year ending
December 31, 2016, by estimating results in the following
ranges:
- Revenues between $550 million and $560 million (as compared to
$546.5 million in fiscal year 2015);
- Adjusted EBITDA between $111 million and $115 million (as
compared to $106.1 million in fiscal year 2015); and
- Free Cash Flow between $20 million and $24 million (as compared
to $18.6 million of Normalized Free Cash Flow in fiscal year
2015).
The company provided the following assumptions that are built
into its outlook:
- No material changes in the regional economy from the last 12
months.
- In the solid waste business, revenue growth of between 2.0% and
3.5%, with price growth from 2.0% to 2.5%.
- In the recycling business, overall revenue declines of between
(7.0%) and (2.0%), driven by lower commodity price, partially
offset by higher volumes.
- In the Other segment, revenue flat to down (1.0%), principally
due to lower commodity price in the Customer Solutions group.
- No new acquisitions are included.
- Capital expenditures of between $46 million and $50 million,
and payments on operating leases of roughly $7 million.
Conference call to discuss
quarter
The company will host a conference call to discuss these results
on Wednesday, March 2, 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 the company’s 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
39841592) until 1:00 p.m. ET on March 9, 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 should
contact Ned Coletta, Chief Financial Officer at (802) 772-2239;
media should contact Joseph Fusco, Vice President at (802)
772-2247; and anyone may 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 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 at the business unit level rather than on
differences from GAAP financial measures.
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, 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,
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-KT for the transition period ended December 31, 2014
and in our Form 10-Q for the quarterly period ended September 30,
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 December
31, |
|
Twelve Months
Ended December
31, |
|
|
|
2015 |
|
|
|
2014 |
|
|
|
2015 |
|
|
|
2014 |
|
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
140,024 |
|
|
$ |
133,538 |
|
|
$ |
546,500 |
|
|
$ |
525,938 |
|
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
Cost of operations |
|
|
96,390 |
|
|
|
95,316 |
|
|
|
382,615 |
|
|
|
377,166 |
|
General and administration |
|
|
20,568 |
|
|
|
17,597 |
|
|
|
72,892 |
|
|
|
66,793 |
|
Depreciation and amortization |
|
|
16,330 |
|
|
|
14,644 |
|
|
|
62,704 |
|
|
|
61,206 |
|
Contract settlement charge |
|
|
1,940 |
|
|
|
- |
|
|
|
1,940 |
|
|
|
- |
|
Divestiture transactions |
|
|
94 |
|
|
|
(553 |
) |
|
|
(5,517 |
) |
|
|
6,902 |
|
Environmental remediation
charge |
|
|
- |
|
|
|
875 |
|
|
|
- |
|
|
|
950 |
|
Severance and reorganization
costs |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
426 |
|
Development project charge |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1,394 |
|
Expense from divestiture,
acquisition and financing costs |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
24 |
|
Gain on settlement of acquisition
related contingent consideration |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(1,058 |
) |
|
|
|
135,322 |
|
|
|
127,879 |
|
|
|
514,634 |
|
|
|
513,803 |
|
|
|
|
|
|
|
|
|
|
Operating income |
|
|
4,702 |
|
|
|
5,659 |
|
|
|
31,866 |
|
|
|
12,135 |
|
|
|
|
|
|
|
|
|
|
Other
expense/(income): |
|
|
|
|
|
|
|
|
Interest expense, net |
|
|
9,994 |
|
|
|
9,643 |
|
|
|
40,090 |
|
|
|
38,082 |
|
Income from equity method
investments |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(90 |
) |
Loss on sale of equity method
investment |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
221 |
|
Impairment of investments |
|
|
1,781 |
|
|
|
2,320 |
|
|
|
2,099 |
|
|
|
2,320 |
|
(Gain) loss on derivative
instruments |
|
|
(12 |
) |
|
|
209 |
|
|
|
227 |
|
|
|
575 |
|
Loss on debt extinguishment |
|
|
133 |
|
|
|
- |
|
|
|
999 |
|
|
|
- |
|
Other income |
|
|
(414 |
) |
|
|
(405 |
) |
|
|
(1,119 |
) |
|
|
(1,177 |
) |
Other expense, net |
|
|
11,482 |
|
|
|
11,767 |
|
|
|
42,296 |
|
|
|
39,931 |
|
|
|
|
|
|
|
|
|
|
Loss before income
taxes |
|
|
(6,780 |
) |
|
|
(6,108 |
) |
|
|
(10,430 |
) |
|
|
(27,796 |
) |
Provision for income
taxes |
|
|
240 |
|
|
|
280 |
|
|
|
1,351 |
|
|
|
1,340 |
|
|
|
|
|
|
|
|
|
|
Net loss |
|
|
(7,020 |
) |
|
|
(6,388 |
) |
|
|
(11,781 |
) |
|
|
(29,136 |
) |
|
|
|
|
|
|
|
|
|
Less: Net (loss) income
attributable to noncontrolling interests |
|
|
(1 |
) |
|
|
5 |
|
|
|
1,188 |
|
|
|
(3,745 |
) |
|
|
|
|
|
|
|
|
|
Net loss attributable
to common stockholders |
|
$ |
(7,019 |
) |
|
$ |
(6,393 |
) |
|
$ |
(12,969 |
) |
|
$ |
(25,391 |
) |
|
|
|
|
|
|
|
|
|
Basic
and diluted weighted average common shares outstanding |
|
|
40,889 |
|
|
|
40,367 |
|
|
|
40,642 |
|
|
|
40,147 |
|
|
|
|
|
|
|
|
|
|
Basic
and diluted earnings per common share |
|
$ |
(0.17 |
) |
|
$ |
(0.16 |
) |
|
$ |
(0.32 |
) |
|
$ |
(0.63 |
) |
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
$ |
27,765 |
|
|
$ |
24,399 |
|
|
$ |
106,074 |
|
|
$ |
96,848 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASELLA WASTE SYSTEMS, INC. AND
SUBSIDIARIES |
CONDENSED CONSOLIDATED BALANCE
SHEETS |
(Unaudited) |
(In thousands) |
|
|
|
|
|
|
|
|
|
|
ASSETS |
|
December 31,
2015 |
|
December 31,
2014 |
|
|
|
|
|
CURRENT ASSETS: |
|
|
|
|
Cash and cash equivalents |
|
$ |
2,312 |
|
|
$ |
2,205 |
|
Restricted cash |
|
|
- |
|
|
|
76 |
|
Accounts receivable - trade, net of
allowance for doubtful accounts |
|
|
60,167 |
|
|
|
55,750 |
|
Other current assets |
|
|
14,189 |
|
|
|
20,638 |
|
Total current
assets |
|
|
76,668 |
|
|
|
78,669 |
|
|
|
|
|
|
Property, plant and
equipment, net of accumulated depreciation and amortization |
|
|
402,252 |
|
|
|
414,542 |
|
Goodwill |
|
|
118,976 |
|
|
|
119,170 |
|
Intangible assets,
net |
|
|
9,252 |
|
|
|
11,808 |
|
Restricted assets |
|
|
2,251 |
|
|
|
6,632 |
|
Cost method
investments |
|
|
12,333 |
|
|
|
14,432 |
|
Other non-current
assets |
|
|
28,151 |
|
|
|
24,542 |
|
|
|
|
|
|
Total assets |
|
$ |
649,883 |
|
|
$ |
669,795 |
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' DEFICIT |
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES: |
|
|
|
|
Current maturities of long-term
debt and capital leases |
|
$ |
1,448 |
|
|
$ |
1,656 |
|
Accounts payable |
|
|
44,921 |
|
|
|
48,518 |
|
Other accrued liabilities |
|
|
38,977 |
|
|
|
36,258 |
|
Total current
liabilities |
|
|
85,346 |
|
|
|
86,432 |
|
|
|
|
|
|
Long-term debt and
capital leases, less current maturities |
|
|
522,199 |
|
|
|
534,055 |
|
Other long-term
liabilities |
|
|
63,935 |
|
|
|
61,328 |
|
|
|
|
|
|
Total stockholders'
deficit |
|
|
(21,597 |
) |
|
|
(12,020 |
) |
|
|
|
|
|
Total liabilities and stockholders'
deficit |
|
$ |
649,883 |
|
|
$ |
669,795 |
|
|
|
|
|
|
|
|
|
|
|
CASELLA WASTE SYSTEMS, INC. AND
SUBSIDIARIES |
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS |
(Unaudited) |
(In thousands) |
|
|
|
|
|
Twelve Months Ended December
31, |
|
|
|
2015 |
|
|
|
2014 |
|
|
|
|
|
|
Cash Flows from
Operating Activities: |
|
|
|
|
Net loss |
|
$ |
(11,781 |
) |
|
$ |
(29,136 |
) |
Adjustments to
reconcile net loss to net cash provided by operating activities
- |
|
|
|
|
Gain on sale of property and
equipment |
|
|
(131 |
) |
|
|
(493 |
) |
Depletion of landfill operating
lease obligations |
|
|
9,428 |
|
|
|
10,725 |
|
Interest accretion on landfill and
environmental remediation liabilities |
|
|
3,449 |
|
|
|
3,606 |
|
Stock-based compensation
expense |
|
|
3,079 |
|
|
|
2,394 |
|
Depreciation and amortization |
|
|
62,704 |
|
|
|
61,206 |
|
Divestiture transactions |
|
|
(5,517 |
) |
|
|
6,902 |
|
Development project charge |
|
|
- |
|
|
|
1,394 |
|
Gain on settlement of acquisition
related contingent consideration |
|
|
- |
|
|
|
(1,058 |
) |
Amortization of discount of
long-term debt |
|
|
364 |
|
|
|
257 |
|
Loss on debt extinguishment |
|
|
999 |
|
|
|
- |
|
Loss on derivative instruments |
|
|
227 |
|
|
|
575 |
|
Impairment of investments |
|
|
2,099 |
|
|
|
2,320 |
|
Income from equity method
investments |
|
|
- |
|
|
|
(90 |
) |
Loss on sale of equity method
investment |
|
|
- |
|
|
|
221 |
|
Excess tax benefit on the vesting
of share based awards |
|
|
(185 |
) |
|
|
(84 |
) |
Deferred income taxes |
|
|
795 |
|
|
|
1,181 |
|
Changes in assets and liabilities,
net of effects of acquisitions and divestitures |
|
|
4,977 |
|
|
|
2,238 |
|
Net Cash Provided by Operating
Activities |
|
|
70,507 |
|
|
|
62,158 |
|
Cash Flows from
Investing Activities: |
|
|
|
|
Aquistions, net of cash
acquired |
|
|
- |
|
|
|
(146 |
) |
Acquisition related additions to
property, plant and equipment |
|
|
- |
|
|
|
(266 |
) |
Additions to property, plant and
equipment |
|
|
(49,995 |
) |
|
|
(67,252 |
) |
Payments on landfill operating
lease contracts |
|
|
(5,385 |
) |
|
|
(5,440 |
) |
Proceeds from divestiture
transactions |
|
|
5,335 |
|
|
|
- |
|
Proceeds from sale of property and
equipment |
|
|
715 |
|
|
|
815 |
|
Proceeds from sale of equity method
investment |
|
|
- |
|
|
|
597 |
|
Proceeds from property insurance
settlement |
|
|
546 |
|
|
|
- |
|
Payments related to
investments |
|
|
- |
|
|
|
(84 |
) |
Net Cash Used In Investing
Activities |
|
|
(48,784 |
) |
|
|
(71,776 |
) |
Cash Flows from
Financing Activities: |
|
|
|
|
Proceeds from long-term
borrowings |
|
|
355,229 |
|
|
|
188,260 |
|
Principal payments on long-term
debt |
|
|
(370,996 |
) |
|
|
(172,977 |
) |
Change in restricted cash |
|
|
4,471 |
|
|
|
(5,819 |
) |
Payments of financing costs |
|
|
(9,025 |
) |
|
|
(2,622 |
) |
Payment of debt extinguishment
costs |
|
|
(146 |
) |
|
|
- |
|
Proceeds from the exercise of share
based awards |
|
|
161 |
|
|
|
286 |
|
Excess tax benefit on the vesting
of share based awards |
|
|
185 |
|
|
|
84 |
|
Distribution to noncontrolling
interest holder |
|
|
(1,495 |
) |
|
|
- |
|
Net Cash (Used In) Provided By
Financing Activities |
|
|
(21,616 |
) |
|
|
7,212 |
|
Net Cash Provided By Discontinued
Operations |
|
|
- |
|
|
|
1,916 |
|
Net
increase (decrease) in cash and cash equivalents |
|
|
107 |
|
|
|
(490 |
) |
Cash and
cash equivalents, beginning of period |
|
|
2,205 |
|
|
|
2,695 |
|
Cash and
cash equivalents, end of period |
|
$ |
2,312 |
|
|
$ |
2,205 |
|
|
|
|
|
|
Supplemental Disclosures of Cash Flow Information: |
|
|
|
|
Cash interest |
|
$ |
35,232 |
|
|
$ |
34,877 |
|
Cash income taxes, net of
refunds |
|
$ |
282 |
|
|
$ |
182 |
|
|
|
|
|
|
Supplemental
Disclosures of Non-Cash Investing and Financing Activities: |
|
|
|
|
Receivable due from noncontrolling
interest holder |
|
$ |
- |
|
|
$ |
152 |
|
Property, plant and equipment
acquired through long-term obligations |
|
$ |
3,264 |
|
|
$ |
- |
|
|
|
|
|
|
CASELLA WASTE SYSTEMS, INC. AND
SUBSIDIARIES |
RECONCILIATION OF CERTAIN NON-GAAP
MEASURES |
(Unaudited) |
(In thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Following is a reconciliation of Adjusted EBITDA and
Adjusted Operating Income to Net Loss: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended December
31, |
|
Twelve Months
Ended December
31, |
|
|
|
2015 |
|
|
|
2014 |
|
|
|
2015 |
|
|
|
2014 |
|
|
|
|
|
|
|
|
|
|
Net Loss |
|
$ |
(7,020 |
) |
|
$ |
(6,388 |
) |
|
$ |
(11,781 |
) |
|
$ |
(29,136 |
) |
Provision for income taxes |
|
|
240 |
|
|
|
280 |
|
|
|
1,351 |
|
|
|
1,340 |
|
Other expense, net |
|
|
1,488 |
|
|
|
2,124 |
|
|
|
2,206 |
|
|
|
1,849 |
|
Interest expense, net |
|
|
9,994 |
|
|
|
9,643 |
|
|
|
40,090 |
|
|
|
38,082 |
|
Gain on settlement of acquisition
related contingent consideration |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(1,058 |
) |
Expense from divestiture,
acquisition and financing costs |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
24 |
|
Severance and reorganization
costs |
|
|
302 |
|
|
|
- |
|
|
|
302 |
|
|
|
426 |
|
Environmental remediation
charge |
|
|
- |
|
|
|
875 |
|
|
|
- |
|
|
|
950 |
|
Development project charge |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1,394 |
|
Divestiture transactions |
|
|
94 |
|
|
|
(553 |
) |
|
|
(5,517 |
) |
|
|
6,902 |
|
Contract settlement charge |
|
|
1,940 |
|
|
|
- |
|
|
|
1,940 |
|
|
|
- |
|
Depreciation and amortization |
|
|
16,330 |
|
|
|
14,644 |
|
|
|
62,704 |
|
|
|
61,206 |
|
Fiscal year-end transition
costs |
|
|
- |
|
|
|
202 |
|
|
|
- |
|
|
|
538 |
|
Proxy contest costs |
|
|
1,111 |
|
|
|
- |
|
|
|
1,902 |
|
|
|
- |
|
Depletion of landfill operating
lease obligations |
|
|
2,409 |
|
|
|
2,621 |
|
|
|
9,428 |
|
|
|
10,725 |
|
Interest accretion on landfill and
environmental remediation liabilities |
|
|
877 |
|
|
|
951 |
|
|
|
3,449 |
|
|
|
3,606 |
|
Adjusted EBITDA |
|
$ |
27,765 |
|
|
$ |
24,399 |
|
|
$ |
106,074 |
|
|
$ |
96,848 |
|
Depreciation and amortization |
|
|
(16,330 |
) |
|
|
(14,644 |
) |
|
|
(62,704 |
) |
|
|
(61,206 |
) |
Depletion of landfill operating
lease obligations |
|
|
(2,409 |
) |
|
|
(2,621 |
) |
|
|
(9,428 |
) |
|
|
(10,725 |
) |
Interest accretion on landfill and
environmental remediation liabilities |
|
|
(877 |
) |
|
|
(951 |
) |
|
|
(3,449 |
) |
|
|
(3,606 |
) |
Adjusted Operating
Income |
|
$ |
8,149 |
|
|
$ |
6,183 |
|
|
$ |
30,493 |
|
|
$ |
21,311 |
|
|
|
|
|
|
|
|
|
|
Following is a reconciliation of Free Cash Flow and
Normalized Free Cash Flow to Net Cash Provided by Operating
Activities: |
|
|
Three Months Ended December
31, |
|
Twelve Months Ended December
31, |
|
|
|
2015 |
|
|
|
2014 |
|
|
|
2015 |
|
|
|
2014 |
|
Net Cash Provided By Operating Activities |
|
$ |
29,977 |
|
|
$ |
24,894 |
|
|
$ |
70,507 |
|
|
$ |
62,158 |
|
Capital
expenditures |
|
|
(18,957 |
) |
|
|
(24,238 |
) |
|
|
(49,995 |
) |
|
|
(67,252 |
) |
Payments on landfill
operating lease contracts |
|
|
(2,429 |
) |
|
|
(2,423 |
) |
|
|
(5,385 |
) |
|
|
(5,440 |
) |
Proceeds from sale of
property and equipment |
|
|
79 |
|
|
|
256 |
|
|
|
715 |
|
|
|
815 |
|
Proceeds from
divestiture transactions |
|
|
- |
|
|
|
- |
|
|
|
5,335 |
|
|
|
- |
|
Proceeds from property
insurance settlement |
|
|
- |
|
|
|
- |
|
|
|
546 |
|
|
|
- |
|
Distribution to
noncontrolling interest holder |
|
|
- |
|
|
|
- |
|
|
|
(1,495 |
) |
|
|
- |
|
Free Cash
Flow |
|
$ |
8,670 |
|
|
$ |
(1,511 |
) |
|
$ |
20,228 |
|
|
$ |
(9,719 |
) |
Landfill closure, site improvement
and remediation expenditures (i) |
|
|
51 |
|
|
|
2,610 |
|
|
|
1,447 |
|
|
|
7,494 |
|
New contract and project capital
expenditures (ii) |
|
|
- |
|
|
|
3,687 |
|
|
|
- |
|
|
|
11,528 |
|
Cash proceeds, net from CARES
dissolution (iii) |
|
|
- |
|
|
|
- |
|
|
|
(3,055 |
) |
|
|
- |
|
Normalized Free Cash
Flow |
|
$ |
8,721 |
|
|
$ |
4,786 |
|
|
$ |
18,620 |
|
|
$ |
9,303 |
|
|
|
|
|
|
|
|
|
|
(i) Includes cash outlays associated with the following
identified items: Worcester landfill capping, BioFuels site
improvement, and Maine Energy decommissioning, demolition and site
remediation. |
(ii) Includes cash outlays related to capital investments
associated with certain new contracts and projects, including: the
Thiopaq gas treatment system, the Lewiston, ME Zero-Sort material
recovery facility, the Rockland, NY material recovery facility, the
Concord, NH waste services contract, the City of Boston, MA
recycling contract, and the Brookline, MA, Otsego, NY, Tompkins, NY
and Schoharie, NY transfer stations. |
(iii) 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 twelve months ended December 31, 2015
and 2014 are as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, |
|
|
|
|
2015 |
|
|
% of Total Revenue |
|
|
2014 |
|
|
% of Total Revenue |
|
Collection |
|
$ |
60,751 |
|
|
|
43.4 |
% |
|
$ |
57,587 |
|
|
|
43.1 |
% |
|
Disposal |
|
|
41,537 |
|
|
|
29.6 |
% |
|
|
36,304 |
|
|
|
27.2 |
% |
|
Power generation |
|
|
1,491 |
|
|
|
1.1 |
% |
|
|
1,834 |
|
|
|
1.4 |
% |
|
Processing |
|
|
1,409 |
|
|
|
1.0 |
% |
|
|
1,976 |
|
|
|
1.5 |
% |
|
Solid waste
operations |
|
|
105,188 |
|
|
|
75.1 |
% |
|
|
97,701 |
|
|
|
73.2 |
% |
|
Organics |
|
|
9,515 |
|
|
|
6.8 |
% |
|
|
9,684 |
|
|
|
7.3 |
% |
|
Customer solutions |
|
|
13,439 |
|
|
|
9.6 |
% |
|
|
13,547 |
|
|
|
10.1 |
% |
|
Recycling |
|
|
11,882 |
|
|
|
8.5 |
% |
|
|
12,606 |
|
|
|
9.4 |
% |
|
Total
revenues |
|
$ |
140,024 |
|
|
|
100.0 |
% |
|
$ |
133,538 |
|
|
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended December 31, |
|
|
|
|
2015 |
|
|
% of Total Revenue |
|
|
2014 |
|
|
% of Total Revenue |
|
Collection |
|
$ |
238,301 |
|
|
|
43.6 |
% |
|
$ |
229,146 |
|
|
|
43.6 |
% |
|
Disposal |
|
|
156,536 |
|
|
|
28.6 |
% |
|
|
138,068 |
|
|
|
26.2 |
% |
|
Power generation |
|
|
6,796 |
|
|
|
1.2 |
% |
|
|
9,083 |
|
|
|
1.7 |
% |
|
Processing |
|
|
6,061 |
|
|
|
1.1 |
% |
|
|
9,320 |
|
|
|
1.8 |
% |
|
Solid waste
operations |
|
|
407,694 |
|
|
|
74.5 |
% |
|
|
385,617 |
|
|
|
73.3 |
% |
|
Organics |
|
|
39,134 |
|
|
|
7.2 |
% |
|
|
39,804 |
|
|
|
7.6 |
% |
|
Customer solutions |
|
|
53,334 |
|
|
|
9.8 |
% |
|
|
52,265 |
|
|
|
9.9 |
% |
|
Recycling |
|
|
46,338 |
|
|
|
8.5 |
% |
|
|
48,252 |
|
|
|
9.2 |
% |
|
Total
revenues |
|
$ |
546,500 |
|
|
|
100.0 |
% |
|
$ |
525,938 |
|
|
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
Components of revenue growth for the three months
ended December 31, 2015 compared to the three months ended December
31, 2014 are as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount |
|
% of Related Business |
|
% of Solid Waste Operations |
|
% of Total Company |
|
Solid Waste
Operations: |
|
|
|
|
|
|
|
|
|
Collection |
|
$ |
3,065 |
|
|
|
5.3 |
% |
|
|
3.1 |
% |
|
|
2.3 |
% |
|
Disposal |
|
|
433 |
|
|
|
1.2 |
% |
|
|
0.5 |
% |
|
|
0.3 |
% |
|
Solid Waste
Yield |
|
|
3,498 |
|
|
|
|
|
3.6 |
% |
|
|
2.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
Collection |
|
|
365 |
|
|
|
|
|
0.4 |
% |
|
|
0.3 |
% |
|
Disposal |
|
|
4,825 |
|
|
|
|
|
4.9 |
% |
|
|
3.6 |
% |
|
Processing |
|
|
(275 |
) |
|
|
|
|
-0.3 |
% |
|
|
-0.2 |
% |
|
Solid Waste
Volume |
|
|
4,915 |
|
|
|
|
|
5.0 |
% |
|
|
3.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
Fuel surcharge |
|
|
(82 |
) |
|
|
|
|
-0.1 |
% |
|
|
-0.1 |
% |
|
Commodity price &
volume |
|
|
(627 |
) |
|
|
|
|
-0.6 |
% |
|
|
-0.4 |
% |
|
Acquisitions, net
divestitures |
|
|
(217 |
) |
|
|
|
|
-0.2 |
% |
|
|
-0.2 |
% |
|
Total Solid
Waste |
|
|
7,487 |
|
|
|
|
|
7.7 |
% |
|
|
5.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
Organics |
|
|
(169 |
) |
|
|
|
|
|
|
-0.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
Customer
Solutions |
|
|
(108 |
) |
|
|
|
|
|
|
-0.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
Recycling
Operations: |
|
|
|
|
|
% of Recycling Operations |
|
|
|
Price |
|
|
(1,301 |
) |
|
|
|
|
-10.4 |
% |
|
|
-1.0 |
% |
|
Volume |
|
|
577 |
|
|
|
|
|
4.6 |
% |
|
|
0.5 |
% |
|
Total
Recycling |
|
|
(724 |
) |
|
|
|
|
-5.8 |
% |
|
|
-0.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
Total
Company |
|
$ |
6,486 |
|
|
|
|
|
|
|
4.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
Solid Waste Internalization Rates by Region for the three
and twelve months ended December 31, 2015 and 2014 are as
follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
|
|
|
|
2015 |
|
|
|
2014 |
|
|
|
2015 |
|
|
|
2014 |
|
|
Eastern region |
|
|
53.9 |
% |
|
|
51.2 |
% |
|
|
51.4 |
% |
|
|
52.9 |
% |
|
Western region |
|
|
73.5 |
% |
|
|
76.9 |
% |
|
|
72.5 |
% |
|
|
78.2 |
% |
|
Solid waste
internalization |
|
|
62.9 |
% |
|
|
63.3 |
% |
|
|
61.4 |
% |
|
|
65.1 |
% |
|
|
|
Components of Capital Expenditures for the three and
twelve months ended December 31, 2015 and 2014 are as follows
(iv): |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
|
|
|
|
2015 |
|
|
|
2014 |
|
|
|
2015 |
|
|
|
2014 |
|
|
Total Growth
Capital Expenditures |
|
$ |
3,857 |
|
|
$ |
5,086 |
|
|
$ |
7,244 |
|
|
$ |
13,789 |
|
|
|
|
|
|
|
|
|
|
|
|
Replacement Capital Expenditures: |
|
|
|
|
|
|
|
|
|
Landfill development |
|
$ |
6,876 |
|
|
$ |
6,392 |
|
|
$ |
18,828 |
|
|
$ |
23,216 |
|
|
Vehicles, machinery,
equipment and containers |
|
5,829 |
|
|
|
9,670 |
|
|
|
18,866 |
|
|
|
25,102 |
|
|
Facilities |
|
|
1,711 |
|
|
|
2,152 |
|
|
|
2,873 |
|
|
|
3,605 |
|
|
Other |
|
|
684 |
|
|
|
938 |
|
|
|
2,184 |
|
|
|
1,540 |
|
|
Total
Replacement Capital Expenditures |
|
$ |
15,100 |
|
|
$ |
19,152 |
|
|
$ |
42,751 |
|
|
$ |
53,463 |
|
|
|
|
|
|
|
|
|
|
|
|
Total Growth and Replacement Capital
Expenditures |
$ |
18,957 |
|
|
$ |
24,238 |
|
|
$ |
49,995 |
|
|
$ |
67,252 |
|
|
|
|
|
|
|
|
|
|
|
|
(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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