Date: September 6, 2006
Source: Casella Waste Systems
Casella Waste Systems, Inc. (Nasdaq: CWST) reported growth in revenues for the first quarter, ended July 31, 2006, to $143.5 million from $132 million in the same period last year. However, profits fell as operating income was $8.7 million versus $13 million a year ago and net income per share fell to a loss of $0.04 from $0.09 per share a year ago. The company blamed a number of factors, including historical record rainfalls affecting already-flat seasonal construction activity, as well as landfill maintenance costs, landfill volume pressures in the Massachusetts market, a drop in plastics commodities pricing, and additional and front-loaded general and administration expenses.
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Casella Waste Systems, Inc. (Nasdaq: CWST), a regional, non-hazardous solid waste services company, today reported financial results for the first quarter of its 2007 fiscal year.
First Quarter Results
For the quarter ended July 31, 2006, the company reported revenues of $143.5 million versus $132.0 million for the same period in fiscal year 2006. The company's net loss per common share was $0.04, versus net income per common share of $0.09 for the same period a year ago. Operating income for the quarter was $8.7 million versus $13.0 million for the same quarter a year ago. Cash provided by operating activities in the quarter was $18.4 million versus $22.6 million in the first quarter last year. The company's earnings before interest, taxes, depreciation and amortization (EBITDA*) was $26.6 million* versus $29.1 million in the first quarter last year. As of July 31, 2006, the company had cash on hand of $6.7 million, and had an outstanding total debt level of $459.7 million.
"Obviously, as we indicated during our pre-release in mid-August, we are disappointed in the company's performance this quarter," John W. Casella, chairman and chief executive officer, said. "As we indicated in mid-August, these results reflect the cumulative impact of a number of factors, including historical record rainfalls affecting already-flat seasonal construction activity, as well as landfill maintenance costs, landfill volume pressures in our Massachusetts market, a drop in plastics commodities pricing, and additional and front-loaded general and administration expenses."
Business Update
The company pointed to positive trends in its business environment:
In the company's market, the slower-growing northeastern U.S., solid waste pricing remains positive at nearly 2 percent, exclusive of the company's fuel surcharge, over the same quarter a year ago;
The company's internalization rate was up 2.6 percent on a year-over-year basis, driven primarily by the Western region.
The company also said EBITDA* from its joint venture, US GreenFiber, increased $1.1 million, or 67.0 percent, on a year-over-year basis in Casella Waste Systems' fiscal year first quarter.
Updated Fiscal 2007 Outlook
The company also updated its guidance for its fiscal year 2007, which began May 1, 2006.
For the fiscal year 2007, the company believes that its results will be approximately in the following ranges:
Revenues between $550.0 million and $570.0 million;
* EBITDA* between $113.0 million and $117.0 million;
* Capital expenditures between $100.0 million and $104.0 million; and
* Free cash flow between $(30.0) million and $(22.0) million.
The EBITDA forecast is based on estimated projections of net cash provided by operating activities of $80.0 million to $84.0 million, interest expense of approximately $39.5 million, depletion of landfill operating leases of $8.0 million, cash taxes of $2.5 million, and positive changes in other assets and liabilities of $4.0 million. Free cash flow of $(30.0) million to $(22.0) million is based on net cash provided by operating activities of $80.0 million to $84.0 million, less estimated capital expenditures of $100.0 million to $104.0 million and other balance sheet changes.
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.
Casella Waste Systems, headquartered in Rutland, Vermont, provides solid waste management services consisting of collection, transfer, disposal and recycling services primarily in the eastern United States.
For further information, contact Richard Norris, chief financial officer; Ned Coletta, director of investor relations; or Joseph Fusco, vice president; at (802) 775-0325, or visit the company's website at www.casella.com.
A replay of the conference call to discuss these results that occurred on Thursday, September 7th, will be available by calling (719) 457-0820 (conference code #6374936) before 11:59 p.m. ET, Thursday, September 14, 2006, or by visiting the company's website.
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