Date: August 16, 2006
Source: Casella Waste Systems, Inc.
Casella Waste Systems, Inc. (Nasdaq: CWST), said that earnings for its first quarter of fiscal year 2007 would be slightly lower resulting in a net loss per share of $(0.02) to $(0.04). The company blamed record level rainfall in the Northeast that suppressed roll-off pulls, especially in Massachusetts, and drove up leachate treatment expenses and other weather related costs at its landfills.
Casella Waste Systems, Inc. Announces Preliminary Results for Fiscal Year 2007 First Quarter
Casella Waste Systems, Inc. (Nasdaq: CWST), a regional, non-hazardous solid waste services company, today said that the quarter's overall performance fell short of expectations and the company will likely report a net earnings per share (EPS) loss of $(0.02) to $(0.04). The company said that its overall company revenues for its first quarter of fiscal year 2007 are on track, with the exception being its South Eastern region.
The company also said it expects its earnings before interest, taxes, depreciation and amortization (EBITDA*) for the fiscal year ending April 30, 2007 to be in a range of $113 million to $117 million.
The company characterized its first quarter results as the cumulative impact of the following key factors:
Historical record rainfalls slowed seasonal construction activity in the north eastern U.S.; the company reported abnormally low roll-off container activity on a year-over-year basis in the Massachusetts market. For the balance of the company's solid waste markets, roll-off pulls were flat on a year-over-year basis.
The company's regional landfills incurred higher than normal leachate treatment and transportation costs, as the volume of rainfall increased leachate production. The landfills also saw a material increase in weather-related maintenance costs.
The company's Worcester, MA landfill closure project faced a weaker-than-expected pricing environment due to the deep per-ton discounting of airspace at a competing landfill preparing for closure. The company chose not to sacrifice its airspace at Worcester at a lower revenue rate; as a result, the Worcester facility's contribution did not offset the loss of its Brockton, MA landfill closure project's contribution on a year-over-year basis.
Lower volumes at the company's Hardwick, MA landfill.
Higher general and administration expenses as a percent of revenue.
Plastic commodities, the only commodity without effective hedges, suffered a precipitous drop in pricing.
The company will host a conference call with investors on August 17, 2006 at 9:00 a.m. ET. Individuals interested in participating in the call should dial (719) 457-2617 at least 10 minutes before start time. The call will also be webcast; to listen, participants should visit Casella Waste Systems' website at www.casella.com and follow the appropriate link to the webcast. A replay of the call will be available by calling (719) 457-0820 (conference code # 4169209) before 11:59 p.m. ET, Thursday, August 24, 2006, or by visiting the company's website.
The company expects to release its full first quarter of fiscal year 2007 results on September 6, 2006 and host a conference call with investors on September 7, 2006; details of that investor call will be announced in late August.
Non-GAAP Financial Measures
In addition to disclosing financial results prepared in accordance with Generally Accepted Accounting Principles (GAAP), we also disclose free cash flow and earnings before interest, taxes, depreciation and amortization (EBITDA), which are non-GAAP measures.
These measures are provided because we understand that certain investors use this information when analyzing the financial position of the solid waste industry, including us. Historically, these measures have been key in comparing operating efficiency of publicly traded companies in the solid waste industry, and assist investors in measuring our ability to meet capital expenditure and working capital requirements. For these reasons we utilize these non- GAAP metrics to measure our performance at all levels. These measures do not represent, and should not be considered as alternatives to cash provided by operating activities as determined in accordance with GAAP. Moreover, these measures do not necessarily indicate whether cash flow will be sufficient for such items as working capital or capital expenditures, or to react to changes in our industry or to the economy generally. Because these measures are not calculated by all companies in the same fashion, they may not be comparable to similarly titled measures reported by other companies.
For further information, contact Richard Norris, chief financial officer; or Joseph Fusco, vice president; at (802) 775-0325, or visit the company's website at www.casella.com.
For more information, visit: www.casella.com.
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