Casella Waste Systems, Inc. (NASDAQ: CWST), a regional solid waste,
recycling and resource management services company, today reported
its financial results for the three-month period ended March 31,
2024.
Highlights for the Three Months Ended
March 31, 2024:
- Revenues
were $341.0 million for the
quarter, up $78.4 million, or
up 29.9%, from the same period
in 2023.
- Overall
solid waste pricing was up 5.5% from the same period in 2023,
driven by 6.2% collection price growth and 4.0% disposal price
growth.
- Net loss was $(4.1) million for the quarter, as
compared to net income of $3.5 million for the same period in
2023.
- Adjusted
EBITDA, a non-GAAP measure, was $71.0
million for the quarter, up $20.4
million, or up
40.2%, from the same period in
2023.
“We had a strong start to the year, driven by the continued
execution of our core operating strategies and pricing programs and
the successful integration of the acquisitions we completed in
2023,” said John W. Casella, Chairman and CEO of Casella Waste
Systems, Inc. “Our first quarter results demonstrated the
dedication of our team and success of our growth strategy and set
us up well for the rest of the year.”
“Our business is performing at a high level and delivered
meaningful year-over-year Adjusted EBITDA margin improvement of 150
basis points,” Casella said. “From a core operations standpoint,
our investments in fleet automation, route optimization, and
onboard computers have allowed us to be more efficient, productive,
and safer in our collection line of business while maintaining our
high customer service standards. Our customer focus also extends
into recycling where we have made meaningful investments in our
processing facilities to meet customer demand for diversion and
sustainability services. Our upgraded Boston recycling facility
continues to perform very well, and we are excited to begin the
upgrade of our Willimantic recycling facility later this year.”
“We remain focused on pricing our services appropriately and
strengthening the quality of our revenue, with overall solid waste
pricing up 5.5%, collection pricing up 6.2% and the average price
per ton at our landfills up 13.3% in the quarter. Solid waste
volumes were down year-over-year, as expected; however, this net
trade-off improved margins,” Casella said.
“The integration of our 2023 acquisitions is advancing well and
we are realizing planned synergies,” Casella said. “While our
recent focus has been on ensuring a smooth transition for our new
employees and customers, looking forward our acquisition pipeline
remains robust with a number of quality companies across our
footprint.”
For the quarter, revenues were $341.0 million, up $78.4 million,
or up 29.9%, from the same period in 2023, with revenue growth
mainly driven by: the rollover contribution from acquisitions
closed in 2023; strong collection and disposal pricing; and higher
recycling commodity prices.
Operating income was $6.8 million for the quarter, down $(3.4)
million from the same period in 2023, mainly due to higher
depreciation and amortization expense related to acquisition growth
and higher expenses from acquisition activities.
Net loss was $(4.1) million for the quarter, or $(0.07) per
diluted common share, as compared to net income of $3.5 million, or
$0.07 per diluted common share, for the same period in 2023 driven
by the factors impacting operating income as well as higher
interest expense. Adjusted Net Loss, a non-GAAP measure, was $(0.8)
million for the quarter, or $(0.01) Adjusted Diluted Loss Per
Common Share, a non-GAAP measure, as compared to Adjusted Net
Income of $5.3 million, or $0.10 Adjusted Diluted Earnings Per
Common Share, for the same period in 2023. Adjusted EBITDA was
$71.0 million for the quarter, up $20.4 million, or up 40.2%, from
the same period in 2023, driven by acquisition rollover and 8.8%
organic growth.
Please refer to "Non-GAAP Performance Measures" included in
"Unaudited Reconciliation of Certain Non-GAAP Measures" below for
additional information and reconciliations of Adjusted Net (Loss)
Income, Adjusted Diluted (Loss) Earnings Per Common Share, Adjusted
EBITDA and other non-GAAP performance measures to their most
directly comparable GAAP measures.
Net cash provided by operating activities was $7.7 million for
the quarter, as compared to $16.1 million for the same period in
2023, driven by higher cash interest payments and changes in
working capital, and Adjusted Free Cash Flow was $(2.4) million for
the quarter, as compared to $2.2 million for the same period in
2023, with the year-over-year variance further driven by higher
capital expenditures.
Please refer to “Non-GAAP Liquidity Measures” included in
“Unaudited Reconciliation of Certain Non-GAAP Measures” below for
additional information and reconciliation of Adjusted Free Cash
Flow to its most directly comparable GAAP measure.
Fiscal Year 2024 Outlook
“Given the continued strength of our solid waste and Resource
Solutions operations, together with the rollover contribution from
closed acquisitions, we are reaffirming our revenue, net income,
Adjusted EBITDA, net cash provided by operating activities, and
Adjusted Free Cash Flow ranges for fiscal year 2024,” Casella said.
“The business is operating in line with plan, and our outlook for
our markets and the economy has not materially changed.”
The Company reaffirmed guidance for the fiscal year ending
December 31, 2024 (“fiscal year 2024”) by estimating results in the
following ranges:
- Revenues between $1.480 billion and $1.510 billion.
- Net income between
$35 million and $45 million.
- Adjusted EBITDA
between $350 million and $360 million.
- Net cash provided by
operating activities between $260 million and $270 million.
- Adjusted Free Cash
Flow between $140 million and $150 million.
The guidance ranges do not include the impact of any
acquisitions that have not been completed. Adjusted EBITDA and
Adjusted Free Cash Flow related to fiscal year 2024 are described
in the Unaudited Reconciliation of Fiscal Year 2024 Outlook
Non-GAAP Measures section of this press release. Net income and Net
cash provided by operating activities are provided as the most
directly comparable GAAP measures to Adjusted EBITDA and Adjusted
Free Cash Flow, respectively, however these forward-looking
estimates for fiscal year 2024 do not contemplate any unanticipated
impacts.
Conference Call to Discuss Quarter
The Company will host a conference call to discuss these results
on Friday, April 26, 2024, at 10:00 a.m. Eastern Time.
Individuals interested in participating in the call should register
for the call by clicking here to obtain a dial in number and unique
passcode. Alternatively, upon registration, the website linked
above provides an option for the conference provider to call the
registrant's phone line, enabling participation on the call.
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 and accessible using the
same link.
About Casella Waste Systems, Inc.
Casella Waste Systems, Inc., headquartered in Rutland, Vermont,
provides resource management expertise and services to residential,
commercial, municipal, institutional and industrial customers,
primarily in the areas of solid waste collection and disposal,
transfer, recycling and organics services in the eastern United
States. For further information, investors may contact Charlie
Wohlhuter, Director of Investor Relations at (802) 772-2230; media
may contact Jeff Weld, Director of Communications at (802)
772-2234; or visit the Company’s website at
http://www.casella.com.
Safe Harbor Statement
Certain matters discussed in this press release, including, but
not limited to, the statements regarding our intentions, beliefs or
current expectations concerning, among other things, our financial
performance; financial condition; operations and services;
prospects; growth; strategies; anticipated impacts from future or
completed acquisitions; and guidance for fiscal year 2024, 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,” “will,” “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 the Company operates and management’s beliefs and
assumptions. The Company cannot guarantee that it 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 the Company's
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 its forward-looking statements.
Such risks and uncertainties include or relate to, among other
things, the following: the Company may be unable to adequately
increase prices or drive operating efficiencies to adequately
offset increased costs and inflationary pressures, including
increased fuel prices and wages; it is difficult to determine the
timing or future impact of a sustained economic slowdown that could
negatively affect our operations and financial results; the closure
of the Subtitle D landfill located in Southbridge, Massachusetts
(“Southbridge Landfill”) could result in material unexpected costs;
the increasing focus on PFAS and other emerging contaminants,
including the recent designation by the EPA of two PFAS chemicals
as hazardous substances under CERCLA, will likely lead to increased
compliance and remediation costs and litigation risks; adverse
weather conditions may negatively impact the Company's revenues and
its operating margin; the Company may be unable to increase volumes
at its landfills or improve its route profitability; the Company
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 the Company's control; the Company may be required
to incur capital expenditures in excess of its estimates; the
Company's insurance coverage and self-insurance reserves may be
inadequate to cover all of its risk exposures; fluctuations in
energy pricing or the commodity pricing of its recyclables may make
it more difficult for the Company to predict its results of
operations or meet its estimates; the Company may be unable to
achieve its acquisition or development targets on favorable pricing
or at all, including due to the failure to satisfy all closing
conditions and to receive required regulatory approvals that may
prevent closing of any announced transaction; the Company may not
be able to successfully integrate and recognize the expected
financial benefits from acquired businesses; and the Company may
incur environmental charges or asset impairments in the future.
There are a number of other important risks and uncertainties
that could cause the Company's 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 the Company's most
recently filed Form 10-K and in other filings that the Company may
make with the Securities and Exchange Commission in the future.
The Company undertakes 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:
Charlie WohlhuterDirector of Investor
Relations(802) 772-2230
Media:
Jeff WeldDirector of
Communications(802) 772-2234http://www.casella.com
|
CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(In thousands, except for per share
data) |
|
|
Three Months EndedMarch 31, |
|
Unaudited |
|
|
2024 |
|
|
|
2023 |
|
Revenues |
$ |
341,008 |
|
|
$ |
262,595 |
|
Operating expenses: |
|
|
|
Cost of operations |
|
230,792 |
|
|
|
180,243 |
|
General and administration |
|
44,334 |
|
|
|
35,679 |
|
Depreciation and amortization |
|
54,037 |
|
|
|
33,435 |
|
Expense from acquisition activities |
|
5,010 |
|
|
|
2,863 |
|
Southbridge Landfill closure charge |
|
— |
|
|
|
110 |
|
|
|
334,173 |
|
|
|
252,330 |
|
Operating income |
|
6,835 |
|
|
|
10,265 |
|
Other
expense (income): |
|
|
|
Interest expense, net |
|
13,070 |
|
|
|
6,275 |
|
Other income |
|
(352 |
) |
|
|
(349 |
) |
Other
expense, net |
|
12,718 |
|
|
|
5,926 |
|
(Loss) income before income taxes |
|
(5,883 |
) |
|
|
4,339 |
|
(Benefit) provision for income taxes |
|
(1,766 |
) |
|
|
791 |
|
Net
(loss) income |
$ |
(4,117 |
) |
|
$ |
3,548 |
|
Basic
weighted average common shares outstanding |
|
58,030 |
|
|
|
51,770 |
|
Basic
(loss) earnings per common share |
$ |
(0.07 |
) |
|
$ |
0.07 |
|
Diluted weighted average common shares outstanding |
|
58,030 |
|
|
|
51,869 |
|
Diluted (loss) earnings per common share |
$ |
(0.07 |
) |
|
$ |
0.07 |
|
|
CASELLA WASTE SYSTEMS, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE
SHEETS(In thousands) |
|
|
March 31,2024 |
|
December 31,2023 |
|
(Unaudited) |
|
|
ASSETS |
|
|
|
CURRENT ASSETS: |
|
|
|
Cash and cash equivalents |
$ |
189,457 |
|
|
$ |
220,912 |
|
Accounts receivable, net of allowance for credit losses |
|
146,795 |
|
|
|
157,324 |
|
Other current assets |
|
49,150 |
|
|
|
48,089 |
|
Total
current assets |
|
385,402 |
|
|
|
426,325 |
|
Property and equipment, net of accumulated depreciation and
amortization |
|
978,622 |
|
|
|
980,553 |
|
Operating lease right-of-use assets |
|
99,679 |
|
|
|
100,844 |
|
Goodwill |
|
736,513 |
|
|
|
735,670 |
|
Intangible assets, net of accumulated amortization |
|
228,865 |
|
|
|
241,429 |
|
Other
non-current assets |
|
48,173 |
|
|
|
50,649 |
|
Total assets |
$ |
2,477,254 |
|
|
$ |
2,535,470 |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
CURRENT LIABILITIES: |
|
|
|
Current maturities of debt |
$ |
63,368 |
|
|
$ |
35,781 |
|
Current operating lease liabilities |
|
8,825 |
|
|
|
9,039 |
|
Accounts payable |
|
79,989 |
|
|
|
116,794 |
|
Current accrued final capping, closure and post-closure costs |
|
10,140 |
|
|
|
10,773 |
|
Other accrued liabilities |
|
81,799 |
|
|
|
106,471 |
|
Total
current liabilities |
|
244,121 |
|
|
|
278,858 |
|
Debt,
less current portion |
|
980,878 |
|
|
|
1,007,662 |
|
Operating lease liabilities, less current portion |
|
66,630 |
|
|
|
66,074 |
|
Accrued final capping, closure and post-closure costs, less current
portion |
|
127,184 |
|
|
|
123,131 |
|
Other
long-term liabilities |
|
32,517 |
|
|
|
37,954 |
|
Total
stockholders' equity |
|
1,025,924 |
|
|
|
1,021,791 |
|
Total liabilities and stockholders' equity |
$ |
2,477,254 |
|
|
$ |
2,535,470 |
|
|
CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS(In thousands) |
|
|
Three Months EndedMarch 31, |
|
|
2024 |
|
|
|
2023 |
|
Cash
Flows from Operating Activities: |
|
|
|
Net
(loss) income |
$ |
(4,117 |
) |
|
$ |
3,548 |
|
Adjustments to reconcile net (loss) income to net cash provided by
operating activities: |
|
|
|
Depreciation and amortization |
|
54,037 |
|
|
|
33,435 |
|
Interest accretion on landfill and environmental remediation
liabilities |
|
2,937 |
|
|
|
2,510 |
|
Amortization of debt issuance costs |
|
741 |
|
|
|
502 |
|
Stock-based compensation |
|
2,135 |
|
|
|
1,976 |
|
Operating lease right-of-use assets expense |
|
4,070 |
|
|
|
3,328 |
|
Disposition of assets, other items and charges, net |
|
320 |
|
|
|
1,315 |
|
Deferred income taxes |
|
(2,425 |
) |
|
|
86 |
|
Changes in assets and liabilities, net of effects of acquisitions
and divestitures |
|
(50,019 |
) |
|
|
(30,621 |
) |
Net cash provided by operating activities |
|
7,679 |
|
|
|
16,079 |
|
Cash
Flows from Investing Activities: |
|
|
|
Acquisitions, net of cash acquired |
|
(294 |
) |
|
|
(263 |
) |
Additions to property and equipment |
|
(30,251 |
) |
|
|
(17,879 |
) |
Proceeds from sale of property and equipment |
|
488 |
|
|
|
415 |
|
Net cash used in investing activities |
|
(30,057 |
) |
|
|
(17,727 |
) |
Cash
Flows from Financing Activities: |
|
|
|
Proceeds from debt borrowings |
|
875 |
|
|
|
— |
|
Principal payments on debt |
|
(9,952 |
) |
|
|
(8,996 |
) |
Payments of debt issuance costs |
|
— |
|
|
|
(282 |
) |
Net cash used in financing activities |
|
(9,077 |
) |
|
|
(9,278 |
) |
Net
decrease in cash and cash equivalents |
|
(31,455 |
) |
|
|
(10,926 |
) |
Cash
and cash equivalents, beginning of period |
|
220,912 |
|
|
|
71,152 |
|
Cash
and cash equivalents, end of period |
$ |
189,457 |
|
|
$ |
60,226 |
|
Supplemental Disclosure of Cash Flow Information: |
|
|
|
Cash interest payments |
$ |
15,500 |
|
|
$ |
5,873 |
|
Cash income tax payments |
$ |
1,681 |
|
|
$ |
4,807 |
|
Right-of-use assets obtained in exchange for financing lease
obligations |
$ |
9,139 |
|
|
$ |
1,634 |
|
Right-of-use assets obtained in exchange for operating lease
obligations |
$ |
1,613 |
|
|
$ |
5,682 |
|
|
|
|
|
CASELLA WASTE SYSTEMS, INC. AND
SUBSIDIARIESUNAUDITED RECONCILIATION OF CERTAIN
NON-GAAP MEASURES(In thousands)
Non-GAAP Performance Measures
In addition to disclosing financial results prepared in
accordance with generally accepted accounting principles in the
United States ("GAAP"), the Company also presents non-GAAP
performance measures such as Adjusted EBITDA, Adjusted EBITDA as a
percentage of revenues, Adjusted Operating Income, Adjusted
Operating Income as a percentage of revenues, Adjusted Net (Loss)
Income and Adjusted Diluted (Loss) Earnings Per Common Share that
provide an understanding of operational performance because it
considers them important supplemental measures of the Company's
performance that are frequently used by securities analysts,
investors and other interested parties in the evaluation of the
Company's results. The Company also believes that identifying the
impact of certain items as adjustments provides more transparency
and comparability across periods. Management uses these non-GAAP
performance measures to further understand its “core operating
performance” and believes its “core operating performance” is
helpful in understanding its ongoing performance in the ordinary
course of operations. The Company believes that providing such
non-GAAP performance measures to investors, in addition to
corresponding income statement measures, affords investors the
benefit of viewing the Company’s 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 tables below set forth such
performance measures on an adjusted basis to exclude such
items:
|
Three Months EndedMarch 31, |
|
|
2024 |
|
|
|
2023 |
|
Net (loss) income |
$ |
(4,117 |
) |
|
$ |
3,548 |
|
Net (loss) income as a percentage of revenues |
(1.2)% |
|
|
1.4 |
% |
(Benefit) provision for income taxes |
|
(1,766 |
) |
|
|
791 |
|
Other income |
|
(352 |
) |
|
|
(349 |
) |
Interest expense, net |
|
13,070 |
|
|
|
6,275 |
|
Expense from acquisition activities (i) |
|
5,010 |
|
|
|
2,863 |
|
Southbridge Landfill closure charge (ii) |
|
— |
|
|
|
110 |
|
Gain on resolution of acquisition-related contingent consideration
(iii) |
|
— |
|
|
|
(589 |
) |
Depreciation and amortization |
|
54,037 |
|
|
|
33,435 |
|
Depletion of landfill operating lease obligations |
|
2,198 |
|
|
|
2,073 |
|
Interest accretion on landfill and environmental remediation
liabilities |
|
2,937 |
|
|
|
2,510 |
|
Adjusted EBITDA |
$ |
71,017 |
|
|
$ |
50,667 |
|
Adjusted EBITDA as a percentage of revenues |
|
20.8 |
% |
|
|
19.3 |
% |
Depreciation and amortization |
|
(54,037 |
) |
|
|
(33,435 |
) |
Depletion of landfill operating lease obligations |
|
(2,198 |
) |
|
|
(2,073 |
) |
Interest accretion on landfill and environmental remediation
liabilities |
|
(2,937 |
) |
|
|
(2,510 |
) |
Adjusted Operating Income |
$ |
11,845 |
|
|
$ |
12,649 |
|
Adjusted Operating Income as a percentage of
revenues |
|
3.5 |
% |
|
|
4.8 |
% |
|
Three Months EndedMarch 31, |
|
|
2024 |
|
|
|
2023 |
|
Net (loss) income |
$ |
(4,117 |
) |
|
$ |
3,548 |
|
Expense from acquisition activities (i) |
|
5,010 |
|
|
|
2,863 |
|
Southbridge Landfill closure charge (ii) |
|
— |
|
|
|
110 |
|
Gain on resolution of acquisition-related contingent consideration
(iii) |
|
— |
|
|
|
(589 |
) |
Tax effect (iv) |
|
(1,683 |
) |
|
|
(657 |
) |
Adjusted Net (Loss) Income |
$ |
(790 |
) |
|
$ |
5,275 |
|
|
|
|
|
Diluted weighted average common shares
outstanding |
|
58,030 |
|
|
|
51,869 |
|
|
|
|
|
Diluted (loss) earnings per common share |
$ |
(0.07 |
) |
|
$ |
0.07 |
|
Expense from acquisition activities (i) |
|
0.09 |
|
|
|
0.05 |
|
Southbridge Landfill closure charge (ii) |
|
— |
|
|
|
— |
|
Gain on resolution of acquisition-related contingent consideration
(iii) |
|
— |
|
|
|
(0.01 |
) |
Tax effect (iv) |
|
(0.03 |
) |
|
|
(0.01 |
) |
Adjusted Diluted (Loss) Earnings Per Common
Share |
$ |
(0.01 |
) |
|
$ |
0.10 |
|
(i) Expense from acquisition activities
is primarily legal, consulting or other similar costs incurred
during the period associated with the due diligence, acquisition
and integration of acquired businesses as part of the Company’s
strategic growth initiative.
(ii) Southbridge Landfill closure charge
are expenses related to the unplanned early closure of the
Southbridge Landfill along with associated legal activities. The
Company initiated the unplanned, premature closure of the
Southbridge Landfill in the fiscal year ended December 31, 2017 due
to the significant capital investment required to obtain expansion
permits and for future development coupled with an uncertain
regulatory environment. The unplanned closure of the Southbridge
Landfill reduced the economic useful life of the assets from prior
estimates by approximately ten years. The Company expects to incur
certain costs through completion of the closure process.
(iii) Gain on resolution of
acquisition-related contingent consideration is associated with the
reversal of a contingency for a transfer station permit expansion
that is no longer considered viable.
(iv) Tax effect of the adjustments is an
aggregate of the current and deferred tax impact of each
adjustment, including the impact to the effective tax rate, current
provision and deferred provision. The computation considers all
relevant impacts of the adjustments, including available net
operating loss carryforwards and the impact on the remaining
valuation allowance.
Non-GAAP Liquidity Measures
In addition to disclosing financial results prepared in
accordance with GAAP, the Company also presents non-GAAP liquidity
measures such as Adjusted Free Cash Flow that provide an
understanding of the Company's liquidity because it considers them
important supplemental measures of its liquidity that are
frequently used by securities analysts, investors and other
interested parties in the evaluation of the Company's cash flow
generation from its core operations that are then available to be
deployed for strategic acquisitions, growth investments,
development projects, unusual landfill closures, site improvement
and remediation, and strengthening the Company’s balance sheet
through paying down debt. The Company also believes that showing
the impact of certain items as adjustments provides more
transparency and comparability across periods. Management uses
non-GAAP liquidity measures to understand the Company’s cash flow
provided by operating activities after certain expenditures along
with its consolidated net leverage and believes that these measures
demonstrate the Company’s ability to execute on its strategic
initiatives. The Company believes that providing such non-GAAP
liquidity measures to investors, in addition to corresponding cash
flow statement measures, affords investors the benefit of viewing
the Company’s liquidity using the same financial metrics that the
management team uses in making many key decisions and understanding
how the core business and cash flow generation has performed. The
table below, on an adjusted basis to exclude certain items, sets
forth such liquidity
measures:
|
Three Months EndedMarch 31, |
|
|
2024 |
|
|
|
2023 |
|
Net cash provided by operating activities |
$ |
7,679 |
|
|
$ |
16,079 |
|
Capital expenditures |
|
(30,251 |
) |
|
|
(17,879 |
) |
Proceeds from sale of property and equipment |
|
488 |
|
|
|
415 |
|
Southbridge Landfill closure (i) |
|
695 |
|
|
|
1,249 |
|
Cash outlays from acquisition activities (ii) |
|
4,494 |
|
|
|
864 |
|
Acquisition capital expenditures (iii) |
|
6,088 |
|
|
|
1,090 |
|
McKean Landfill rail capital expenditures (iv) |
|
2,195 |
|
|
|
424 |
|
FLSA legal settlement payment (v) |
|
6,150 |
|
|
|
— |
|
Landfill capping charge - veneer failure payment (vi) |
|
56 |
|
|
|
— |
|
Adjusted Free Cash Flow |
$ |
(2,406 |
) |
|
$ |
2,242 |
|
(i) Southbridge Landfill closure are cash
outlays associated with the unplanned, early closure of the
Southbridge Landfill. The Company initiated the unplanned,
premature closure of the Southbridge Landfill in the fiscal year
ended December 31, 2017, and expects to incur cash outlays through
completion of the closure and environmental remediation
process.
(ii) Cash outlays from acquisition
activities are cash outlays for transaction and integration costs
relating to specific acquisition transactions and include legal,
environmental, valuation and consulting as well as asset, workforce
and system integration costs as part of the Company’s strategic
growth initiative.
(iii) Acquisition capital expenditures
are acquisition related capital expenditures that are necessary to
optimize strategic synergies associated with integrating newly
acquired operations as contemplated by the discounted cash flow
return analysis conducted by management as part of the acquisition
investment decision. Acquisition related capital expenditures
include costs required to achieve initial operating synergies and
integrate operations.
(iv) McKean Landfill rail capital
expenditures are long-term infrastructure capital expenditures
related to rail side development at the Company's landfill in Mount
Jewett, PA ("McKean Landfill"), which is different from the
landfill construction investments in the normal course of
operations.
(v) FLSA legal settlement payment is the
cash outlay of a legal settlement related to reaching an agreement
in June 2023 with the collective class members of a class action
lawsuit relating to certain claims under the Fair Labor Standards
Act of 1938 (“FLSA”) as well as state wage and hours laws.
(vi) Landfill capping charge - veneer
failure payment is the cash outlay associated with operating
expenses incurred to clean up the affected capping material at the
Company's landfill in Seneca, New York. Engineering analysis is
currently underway to determine root causes and responsibility for
the event.
Non-GAAP financial measures are not in accordance with or an
alternative for GAAP. Adjusted EBITDA, Adjusted EBITDA as a
percentage of revenues, Adjusted Operating Income, Adjusted
Operating Income as a percentage of revenues, Adjusted Net (Loss)
Income, Adjusted Diluted (Loss) Earnings Per Common Share, and
Adjusted 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 EBITDA as a percentage of revenues, Adjusted Operating
Income, Adjusted Operating Income as a percentage of revenues,
Adjusted Net (Loss) Income, Adjusted Diluted (Loss) Earnings Per
Common Share, and Adjusted Free Cash Flow presented by other
companies.
CASELLA WASTE SYSTEMS, INC. AND
SUBSIDIARIESUNAUDITED RECONCILIATION OF FISCAL
YEAR 2024 OUTLOOK NON-GAAP MEASURES(In
thousands)
Following is a reconciliation of the Company's estimated
Adjusted
EBITDA(i)
from estimated Net income for fiscal year
2024:
|
(Estimated) Twelve Months Ending December 31,
2024 |
Net income |
$35,000 - $45,000 |
Provision for income taxes |
18,000 |
Other income |
(2,000) |
Interest expense, net |
51,000 |
Southbridge Landfill closure charge |
1,000 |
Expense from acquisition activities |
6,000 |
Depreciation and amortization |
222,000 |
Depletion of landfill operating lease obligations |
9,000 |
Interest accretion on landfill and environmental remediation
liabilities |
10,000 |
Adjusted EBITDA |
$350,000 - $360,000 |
Following is a reconciliation of the Company's estimated
Adjusted Free Cash
Flow(i)
from estimated Net cash provided by operating activities
for fiscal year 2024:
|
(Estimated) Twelve MonthsEnding December 31,
2024 |
Net cash provided by operating activities |
$260,000 - $270,000 |
Capital expenditures |
(184,000) |
Proceeds from sale of property and equipment |
500 |
FLSA legal settlement payment |
6,150 |
Southbridge Landfill closure |
4,000 |
Acquisition capital expenditures |
40,500 |
Cash outlays from acquisition activities |
6,000 |
McKean Landfill rail capital expenditures |
6,000 |
Landfill capping charge - veneer failure payment |
850 |
Adjusted Free Cash Flow |
$140,000 - $150,000 |
(i) See footnotes for Non-GAAP Performance
Measures and Non-GAAP Liquidity Measures included in the Unaudited
Reconciliation of Certain Non-GAAP Measures for further disclosure
over the nature of the various adjustments to estimated Adjusted
EBITDA and estimated Adjusted Free Cash Flow.
CASELLA WASTE SYSTEMS, INC. AND
SUBSIDIARIESUNAUDITED SUPPLEMENTAL DATA
TABLES(In thousands)
Amounts of total revenues attributable to services
provided for the three months
ended March 31, 2024 and
2023 are as follows:
|
Three Months Ended March 31, |
|
|
2024 |
|
% of TotalRevenues |
|
|
2023 |
|
% of TotalRevenues |
Collection |
$ |
211,360 |
|
62.0 |
% |
|
$ |
139,977 |
|
53.3 |
% |
Disposal |
|
50,139 |
|
14.7 |
% |
|
|
51,466 |
|
19.6 |
% |
Landfill gas-to-energy |
|
2,509 |
|
0.7 |
% |
|
|
1,924 |
|
0.7 |
% |
Processing |
|
1,929 |
|
0.6 |
% |
|
|
1,576 |
|
0.6 |
% |
Solid waste operations |
|
265,937 |
|
78.0 |
% |
|
|
194,943 |
|
74.2 |
% |
Processing |
|
29,762 |
|
8.7 |
% |
|
|
22,806 |
|
8.7 |
% |
National
Accounts |
|
45,309 |
|
13.3 |
% |
|
|
44,846 |
|
17.1 |
% |
Resource Solutions operations |
|
75,071 |
|
22.0 |
% |
|
|
67,652 |
|
25.8 |
% |
Total revenues |
$ |
341,008 |
|
100.0 |
% |
|
$ |
262,595 |
|
100.0 |
% |
Components of revenue growth for the three months
ended March 31, 2024 compared to
the three months ended March 31, 2023
are as follows:
|
Amount |
|
%
ofRelatedBusiness |
|
% ofOperations |
|
% of TotalCompany |
Solid waste operations: |
|
|
|
|
|
|
|
Collection |
$ |
8,741 |
|
|
6.2 |
% |
|
4.5 |
% |
|
3.3 |
% |
Disposal |
|
2,077 |
|
|
4.0 |
% |
|
1.0 |
% |
|
0.8 |
% |
Solid waste price |
|
10,818 |
|
|
|
|
5.5 |
% |
|
4.1 |
% |
Collection |
|
(1,699 |
) |
|
(1.2)% |
|
(0.9)% |
|
(0.6)% |
Disposal |
|
(3,841 |
) |
|
(7.5)% |
|
(2.0)% |
|
(1.5)% |
Processing |
|
159 |
|
|
|
|
0.1 |
% |
|
0.1 |
% |
Solid waste volume |
|
(5,381 |
) |
|
|
|
(2.8)% |
|
(2.0)% |
Surcharges and other fees |
|
(1,210 |
) |
|
|
|
(0.6)% |
|
(0.5)% |
Commodity price and volume |
|
778 |
|
|
|
|
0.4 |
% |
|
0.3 |
% |
Acquisitions |
|
65,989 |
|
|
|
|
33.9 |
% |
|
25.1 |
% |
Total solid waste operations |
|
70,994 |
|
|
|
|
36.4 |
% |
|
27.0 |
% |
Resource Solutions
operations: |
|
|
|
|
|
|
|
Price |
|
6,204 |
|
|
|
|
9.2 |
% |
|
2.4 |
% |
Volume |
|
(1,361 |
) |
|
|
|
(2.0)% |
|
(0.4)% |
Surcharges and other fees |
|
(427 |
) |
|
|
|
(0.6)% |
|
(0.2)% |
Acquisitions |
|
3,003 |
|
|
|
|
4.4 |
% |
|
1.1 |
% |
Total Resource Solutions operations |
|
7,419 |
|
|
|
|
11.0 |
% |
|
2.9 |
% |
Total Company |
$ |
78,413 |
|
|
|
|
|
|
29.9 |
% |
Components of capital
expenditures(i)
for the three months
ended March 31, 2024 and
2023 are as follows:
|
Three Months EndedMarch 31, |
|
|
2024 |
|
|
|
2023 |
|
Growth capital expenditures: |
|
|
|
Acquisition capital expenditures |
$ |
6,088 |
|
|
$ |
1,090 |
|
McKean Landfill rail capital expenditures |
|
2,195 |
|
|
|
424 |
|
Other |
|
2,634 |
|
|
|
1,396 |
|
Growth capital expenditures |
|
10,917 |
|
|
|
2,910 |
|
Replacement capital expenditures: |
|
|
|
Landfill development |
|
4,202 |
|
|
|
1,462 |
|
Vehicles, machinery, equipment and containers |
|
12,754 |
|
|
|
7,799 |
|
Facilities |
|
1,562 |
|
|
|
4,055 |
|
Other |
|
816 |
|
|
|
1,653 |
|
Replacement capital expenditures |
|
19,334 |
|
|
|
14,969 |
|
Capital expenditures |
$ |
30,251 |
|
|
$ |
17,879 |
|
(i) The Company's capital expenditures are
broadly defined as pertaining to either growth or replacement
activities. Growth capital expenditures are defined as costs
related to development projects, organic business growth, and the
integration of newly acquired operations. Growth capital
expenditures include costs related to the following: 1) acquisition
capital expenditures that are necessary to optimize strategic
synergies associated with integrating newly acquired operations as
contemplated by the discounted cash flow return analysis conducted
by management as part of the acquisition investment decision and
includes the capital expenditures required to achieve initial
operating synergies and integrate operations; 2) McKean Landfill
rail capital expenditures, which is unique and different from
landfill construction investments in the normal course of
operations because the Company is investing in long-term
infrastructure; and 3) development of new airspace, permit
expansions, and new recycling contracts, equipment added directly
as a result of organic business growth and infrastructure added 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, replacement costs for equipment and other
capital expenditures due to age or obsolescence, and capital items
not defined as growth capital expenditures.
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