Casella Waste Systems, Inc. Reports Third Quarter Fiscal Year 2014 Results

2014-05-15 16:40:49

RUTLAND, Vt., March 5, 2014 (GLOBE NEWSWIRE) -- Casella Waste Systems, Inc.(Nasdaq:CWST), a regional solid waste, recycling and resource management services company, today reported financial results for its third quarter fiscal year 2014.
Key numbers for the quarter included:

Revenue growth of $5.7 million, or 5.1 percent, from the same quarter last year.
Adjusted EBITDA* was $18.1 million for the quarter, down $1.7 million from the same quarter last year.
The company reaffirms Revenue, Adjusted EBITDA and Free Cash Flow* guidance ranges for fiscal year 2014.

For the quarter ended January 31, 2014, revenues were $117.9 million, up $5.7 million, or 5.1 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 1.7 percent as a percentage of segment revenues.
Operating loss was ($1.3) million for the quarter, compared to operating income of $0.1 million from the same quarter last year. The current quarter includes $1.4 million of deferred costs associated with a landfill gas development project no longer deemed viable, a $0.3 million environmental remediation charge, and $0.1 million of expenses related to acquisition activities. By comparison, the quarter ended January 31, 2013, included a $1.6 million severance and reorganization charge related to the sale of the Maine Energy facility and other realignment activities, and $0.8 million of expenses related to the divestiture of Maine Energy and the acquisition of Blow Bros ("BBI").
Excluding these charges, Adjusted Operating Income* in the current quarter was $0.5 million, down $1.9 million from same quarter last year. Adjusted EBITDA was $18.1 million for the quarter, down $1.7 million from the same quarter last year.
"The positive trends we experienced in the first six months of the fiscal year were interrupted in our third quarter, mainly due to negative impacts from inclement weather, which remains severe and persistent even by northeastern U.S. standards," said John W. Casella, chairman and CEO of Casella Waste Systems.
"The challenging environment in which we operated in December and January had a broad, negative impact on productivity and volumes in our collection, disposal and recycling businesses," Casella said. "Overall, we estimate that weather negatively impacted Adjusted EBITDA by approximately $2.1 million during the quarter."
"As always, we continue to focus intensely on what we can control," Casella said. "We have responded to this challenge by flexing our costs beyond what we normally manage for seasonality, and we continue to aggressively sell our services to drive revenue growth."
The Company's net loss attributable to common stockholders was ($10.8) million, or ($0.27) per share for the quarter, compared to ($11.4) million, or ($0.29) per share for the same quarter last year.
In addition to the unusual items identified above, the current quarter ended January 31, 2014 included a $0.6 million gain on the divestiture of the Company's 50 percent membership interest in US GreenFiber LLC, while the quarter ended January 31, 2013included a $5.9 million loss on the extinguishment of debt related to the repurchase of the Company's second lien notes in November 2012, a $0.3 million loss from discontinued operations, and a $5.2 million tax benefit associated with the reduction of the deferred tax valuation allowance associated with the acquisition of BBI.
Nine Months Financial Results
Key numbers for the nine months ended January 31, 2014 included:

Revenue growth of $32.1 million, or 9.3 percent, from the same period last year.
Adjusted EBITDA was $76.1 million, up $7.6 million, or 11.1 percent, from the same period last year.
Adjusted Operating Income* was $20.0 million, up $4.9 million, or 32.5 percent, from the same period last year.

For the nine months ended January 31, 2014, revenues were $378.7 million, up $32.1 million, or 9.3 percent, from the same period last year. Operating income was $17.9 million for the nine month period, up $7.6 million from the same period last year. The company's net loss attributable to common stockholders was ($11.3) million, or ($0.28) per common share for the nine month period, compared to ($40.7) million, or ($1.26) per share for the same period last year.
Fiscal 2014 Outlook
The company reaffirmed its fiscal year guidance in the following categories:

Revenues between $480.0 million and $490.0 million.
Adjusted EBITDA between $95.0 million and $98.0 million.
Free Cash Flow between $4.0 million and $8.0 million.

*Non-GAAP Financial Measures
In addition to disclosing financial results prepared in accordance with Generally Accepted Accounting Principles in the United States (GAAP), the company also discloses earnings before interest, taxes, depreciation and amortization, adjusted for accretion, depletion of landfill operating lease obligations, gain on sale of assets, development project charge write-offs, legal settlement charges, tax settlement costs, bargain purchase gains, asset impairment charges, environmental remediation charges, severance and reorganization charges, expenses from divestiture, acquisition and financing costs, as well as losses on divestiture (Adjusted EBITDA) which is a non-GAAP measure. The company also discloses earnings before interest, taxes, adjusted for gain on sale of assets, development project charge write-offs, legal settlement charges, tax settlement costs, bargain purchase gains, asset impairment charges, environmental remediation charges, severance and reorganization charges, expenses from divestiture, acquisition and financing costs, as well as losses on divestiture (Adjusted Operating Income) which is a non-GAAP measure. The company also discloses Free Cash Flow, which is defined as net cash provided by operating activities, less capital expenditures attributable to growth and maintenance (excluding acquisition related capital), less payments on landfill operating leases, less assets acquired through financing leases, plus proceeds from the sale of property and equipment, plus contributions from non-controlling interest holders, which is a non-GAAP measure. Adjusted EBITDA and Adjusted Operating Income are reconciled to net income (loss), while Free Cash Flow is reconciled to net cash provided by operating activities.
The company presents Adjusted EBITDA, Adjusted Operating Income, and Free Cash Flow because it considers them important supplemental measures of its performance and believes they are frequently used by securities analysts, investors and other interested parties in the evaluation of the company's results. Management uses these non-GAAP measures to further understand the company's "core operating performance." The company believes its "core operating performance" represents its on-going performance in the ordinary course of operations. The company believes that providing Adjusted EBITDA, Adjusted Operating Income, and Free Cash Flow to investors, in addition to corresponding income statement and cash flow statement measures, affords investors the benefit of viewing its performance using the same financial metrics that the management team uses in making many key decisions and understanding how the core business and its results of operations may look in the future. The company further believes that providing this information allows its investors greater transparency and a better understanding of its core financial performance. In addition, the instruments governing the company's indebtedness use EBITDA (with additional adjustments) to measure its compliance with covenants such as interest coverage, leverage and debt incurrence.
Non-GAAP financial measures are not in accordance with or an alternative for GAAP. Adjusted EBITDA, Adjusted Operating Income, and Free Cash Flow should not be considered in isolation from or as a substitute for financial information presented in accordance with GAAP, and may be different from Adjusted EBITDA, Adjusted Operating Income, or Free Cash Flow presented by other companies.
About Casella Waste Systems, Inc.
Casella Waste Systems, Inc., headquartered in Rutland, Vermont, provides solid waste management services consisting of collection, transfer, disposal, and recycling services in the northeastern United States. For further information, investors contact Ned Coletta, Chief Financial Officer at (802) 772-2239; media contact Joseph Fusco, Vice President at (802) 772-2247; or visit the company's website at http://www.casella.com.
Conference call to discuss quarter
The Company will host a conference call to discuss these results on Thursday, March 6, 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 athttp://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 93667119) until 11:59 p.m. ET on Thursday, March 13, 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.
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.