RUTLAND, VT — (Marketwire) — 06/27/12 — Casella Waste Systems, Inc. (NASDAQ: CWST), a regional solid waste, recycling and resource management services company, today reported financial results for its fourth quarter and 2012 fiscal year, and gave guidance for its 2013 fiscal year.
Highlights for the quarter included:
For the quarter ended April 30, 2012, revenues were $109.2 million, down $0.3 million or 0.3 percent from the same quarter last year, with strong collection pricing offset by lower collection volumes and lower recycling commodity prices.
The current quarter includes a $40.7 million non-cash asset impairment charge for our Eastern Region assets related to the potential sale of the Maine Energy Recovery Company, a waste-to-energy facility, and a $0.3 million loss on debt modification. The quarter ended April 30, 2011 also included various unusual and one-time items, including a $45.6 million gain on the disposal of discontinued operations, net of income taxes.
Including the non-cash asset impairment charge and the loss on debt modification charge, the company–s net loss attributable to common shareholders was ($49.1) million, or ($1.83) per common share for the quarter, compared to net income of $48.8 million, or $1.85 per share for the same quarter last year.
Operating loss was ($37.8) million for the quarter, down $35.2 million from the same quarter last year. Excluding the unusual and one-time gains and charges from each period, Adjusted Operating Income* in the current quarter was $2.9 million, up $0.8 million from the same quarter last year.
“We made significant progress in fiscal year 2012 on several important operational and strategic fronts, including the introduction of a successful collection pricing program, the consolidation of back-office functions into a shared services center, and the issuance of permits and resolution of long-standing legal challenges at three of our landfills,” said John W. Casella, chairman and CEO of Casella Waste Systems. “We are particularly pleased with our ability to yield price in a difficult economic environment. Our new yield management tools and philosophy have positioned the company as a market price leader, particularly in secondary and tertiary markets.”
“We have implemented a number of strategies to improve financial performance and reduce our exposure to risk in the future,” Casella said. “We continue to see weakness in the economy during the first two months of our fiscal year, with lower special waste volumes to the landfills and lower energy prices. As a result of that uncertainty, we are providing a fairly muted outlook for fiscal year 2013. Our focus for fiscal year 2013 includes: selling our waste-to-energy facility, capturing more of our landfill volumes at the curb, continuing to improve our operating efficiencies, effectively managing pricing yield, and improving free cash generation.”
Fiscal Year 2012 Financial Results
Highlights for the fiscal year included:
For the fiscal year ended April 30, 2012, revenues were $480.8 million, up $14.7 million or 3.2 percent over fiscal year 2011. The current fiscal year includes a $40.7 million non-cash asset impairment charge, $1.4 million legal settlement charges, a $0.1 million development project charge, a $0.3 million loss on debt modification, the company–s 50 percent share of US GreenFiber LLC–s $10.2 million non-cash goodwill impairment charge, and a $10.7 million non-cash impairment of equity method investment charge to write down the book value of the US GreenFiber LLC investment. Fiscal year 2011 also included various unusual and one-time items, including a $43.6 million gain on the disposal of discontinued operations net of income taxes.
The company–s net loss attributable to common shareholders was ($77.6) million, or ($2.90) per common share for fiscal year 2012, compared to a net income of $38.4 million, or $1.47 per share for the same period last year.
Operating loss was ($11.5) million for fiscal year 2012, down $40.1 million from the same period last year. Excluding the unusual and one-time gains and charges from each period, Adjusted Operating Income for fiscal year 2012 was $30.7 million, up $0.9 million from the same period last year.
Fiscal 2013 Outlook
“In fiscal year 2013, our emphasis will be on improving cash flows through opportunistic pricing, cost controls and operating efficiencies, and volume growth through focused capital deployment,” Casella said. “Our plan for the fiscal year assumes that economic activity remains soft with limited GDP growth, energy prices remain at current low levels, and landfill special waste volumes decline.”
The company provided guidance for its fiscal year 2013, which began May 1, 2012, by estimating results in the following ranges:
Revenues between $482.0 million and $492.0 million (representing growth of 0.2 percent to 2.3 percent);
Adjusted EBITDA* between $104.0 million and $108.0 million; and
Free Cash Flow* between $7.0 million and $11.0 million.
The company said the following assumptions are built into its fiscal year 2013 outlook:
The above guidance does not include the financial impacts from the potential sale of Maine Energy or the refinancing of the 11.0 percent $180.0 million second lien notes due July 2014.
No material changes in the regional economy from fiscal year 2012.
In the solid waste business, revenue growth of between 2.5 percent and 4.5 percent, with price growth from 1.5 percent to 2.0 percent; volumes and roll-over impact of acquisitions contributing between 1.0 percent and 2.5 percent.
We expect the recent Southbridge and Chemung landfill expansions to add an incremental $3.5 to $4.0 million of Adjusted EBITDA in fiscal year 2013.
In the recycling business, overall revenue declines of between 5.0 percent and 8.5 percent, with price declines on lower commodity pricing and volumes up 1.5 percent to 2.0 percent on continued adoption of Zero-Sort® Recycling. Our risk mitigation strategies continue to effectively manage commodity pricing risk in the recycling business, and as such we expect Adjusted EBITDA to be down $0.9 million to $1.6 million.
In the major accounts business, overall revenue declines of approximately 10.0 percent, principally due to the anticipated loss of volumes from one brokerage customer. This customer loss is expected to negatively impact Adjusted EBITDA by approximately $0.4 million.
No acquisitions beyond the above-mentioned roll-over impact of the acquisitions completed during fiscal year 2012 are included.
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-off, legal settlement charges, a bargain purchase gain, asset impairment charges, an environmental remediation charge, severance and reorganization charges, as well as a one-time discretionary bonus (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-off, legal settlement charges, a bargain purchase gain, asset impairment charges, an environmental remediation charge, severance and reorganization charges, as well as a one-time discretionary bonus (Adjusted Operating Income) which is a non-GAAP measure. The company also discloses Free Cash Flow, which is defined as net cash provided by operating activities, less capital expenditures attributable to growth and maintenance (excluding acquisition related capital), less payments on landfill operating leases, plus contributions from non-controlling interest holder, which is a non-GAAP measure. Adjusted EBITDA is 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 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.
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, vice president of finance and investor relations at (802) 772-2239, or Ed Johnson, chief financial officer at (802) 772-2241, media contact Joseph Fusco, vice president at (802) 772-2247, or visit the company–s website at .
The Company will host a conference call to discuss these results on Thursday, June 28, 2012 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 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 91134901) until 11:59 p.m. ET on Thursday, July 5, 2012.
Certain matters discussed in this press release are “forward-looking statements” intended to qualify for the safe harbors from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements can generally be identified as such by the context of the statements, including words such as “believe,” “expect,” “anticipate,” “plan,” “may,” “will,” “would,” “intend,” “estimate,” “guidance” and other similar expressions, whether in the negative or affirmative. These forward-looking statements are based on current expectations, estimates, forecasts and projections about the industry and markets in which we operate and management–s beliefs and assumptions. We cannot guarantee that we actually will achieve the plans, intentions, expectations or guidance disclosed in the forward-looking statements made. Such forward-looking statements, and all phases of our operations, involve a number of risks and uncertainties, any one or more of which could cause actual results to differ materially from those described in our forward-looking statements. Such risks and uncertainties include or relate to, among other things: current economic conditions that have adversely affected and may continue to adversely affect our revenues and our operating margin; we may be unable to reduce costs or increase pricing or volumes sufficiently to achieve estimated Adjusted EBITDA and other targets; landfill operations and permit status may be affected by factors outside our control; we may be required to incur capital expenditures in excess of our estimates; fluctuations in energy pricing or the commodity pricing of our recyclables may make it more difficult for us to predict our results of operations or meet our estimates; we may incur environmental charges or asset impairments in the future; and we may be unable to sell our waste-to-energy facility and shift waste volumes to other landfill sites. 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, 2011.
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
Vice President of Finance and Investor Relations
(802) 772-2239
Ed Johnson
Chief Financial Officer
(802) 772-2241
Media:
Joseph Fusco
Vice President
(802) 772-2247