Casella Waste Systems, Inc. Announces Third Quarter Fiscal Year 2009 Results
Wednesday March 4, 2009, 4:15 pm EST
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RUTLAND, VT--(MARKET WIRE)--Mar 4, 2009 -- Casella Waste Systems, Inc. (NasdaqGS:CWST - News), a regional solid waste, recycling and resource management services company, today reported financial results for the third quarter of its 2009 fiscal year.
Third Quarter Financial Results
For the quarter ended January 31, 2009, the company reported revenues of $121.2 million, down $19.7 million, or 14.0 percent below the same quarter last year. Accounting for 73.6 percent of the decline of overall revenues, recycling revenues were down $14.5 million over the same quarter last year, primarily as the result of lower commodity prices.
Solid waste revenues were down 7.7 percent from the same quarter last year; core pricing was up 2.5 percent (excluding revenue losses from fuel, oil, and environmental fees), and core volumes were down 3.6 percent (excluding revenues losses due to the ramp-down of landfill volumes at the Pine Tree landfill in Hampden, Maine as it approaches the end of life, the planned closure of the Colebrook, NH landfill in early August 2008, and the idling of a C&D processing facility in October 2008).
The company's net loss applicable to common shareholders was ($3.8) million, or ($0.15) per common share, compared to a net loss of ($4.6) million, or ($0.18) per share for the same quarter last year. Reported results for the 2009 quarter include a pre-tax environmental remediation charge of $2.8 million ($0.07 per share after taxes), and reported results for the 2008 quarter include pre-tax management reorganization charges of $1.2 million ($0.03 per share after taxes).
Operating income for the quarter was $1.9 million, down $5.5 million from the same quarter last year. Net cash provided by operating activities in the quarter was $11.4 million, compared to $16.1 million for the same quarter last year. The company's earnings before interest, taxes, depreciation and amortization, environmental remediation charge, and development project charge (EBITDA*) were $21.7 million, down $4.7 million from the same quarter last year. The company's free cash flow* in the quarter was $0.2 million, compared to $0.5 million in the same quarter last year.
Lower year-over-year operating performance was mainly driven by significantly lower commodity pricing, lower shipped commodity volumes, and one-time costs incurred in the recycling business associated with the global commodity market collapse and the commissioning of two new Zero-Sort Recycling(TM) facilities. Other negative factors during the quarter that impacted operating performance include lower hauling and transfer volumes, the ramp-down of landfill volumes at the Pine Tree landfill, and a negative variance from the planned closure of the Colebrook landfill. These factors were partially offset by higher hauling and landfill pricing, the ramp-up of the new landfill gas-to-energy facilities at the Hyland and Clinton landfills, and cost cutting initiatives.
During the third quarter, the recycling operations incurred approximately $4.0 million of one-time costs associated with impacts from the global commodity collapse in November 2008, including temporary commodity warehousing and inventory costs and higher than market revenue shares to municipal partners due to contractual obligations that calculate revenue shares based on lagging average commodity prices; and the upgrade of the Philadelphia and Boston materials recycling facilities to Zero-Sort Recycling(TM).
During the quarter ended January 31, 2009, the company recorded an environmental remediation charge of $2.8 million related to a scrap yard and transfer station owned by the company. The company expects the majority of these funds to be spent in fiscal 2011.
Nine Month Financial Results
For the nine months ended January 31, 2009, the company reported revenues of $436.6 million, down $3.3 million, or 0.8 percent below the same period last year. The company's net income per common share for the nine month period was $0.02, compared to $0.00 per common share for the same period last year. Reported results for the nine months ended January 31, 2009, include a pre-tax environmental remediation charge of $2.8 million ($0.07 per share after taxes), and reported results for the same period last year include pre-tax management reorganization charges of $1.2 million ($0.03 per share after taxes).
Operating income for the nine month period was $33.5 million, down $3.6 million from the same period last year. Net cash provided by operating activities for the nine month period was $50.6 million, down $0.8 million compared to the same period last year. EBITDA was $92.3 million for the nine month period, down $3.9 million from the same period last year. The company's free cash flow for nine months period was $4.6 million, up $5.2 million over the same period last year.
Business Update
"Our team rose to the challenges presented by the rapid collapse of the commodities markets and the decline in the regional economy during an extremely challenging third quarter," John W. Casella, chairman and CEO of Casella Waste Systems, said.
"The global financial collapse combined with a widening worldwide recession caused a significant downturn in commodity pricing from October 2008 through the end of the quarter," Casella said. "And, while the majority of our residential and commercial solid waste business is recession resistant, we saw lower solid waste volumes in more economically sensitive markets."
"We are making intelligent choices during this downturn that I believe will significantly strengthen the company now and in the future," Casella said. "We are 18 months into a comprehensive effort to improve all aspects of our operating structure and daily business practices, and we are successfully implementing programs that reduce cos
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