Casella Waste Systems (CWST) Plans Debt Refinancing; Boosts FY16 adj.-EBITDA Outlook

September 26, 2016 7:21 AM EDT
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Casella Waste Systems, Inc. (Nasdaq: CWST) announced that it has invited certain prospective lenders to a meeting scheduled for September 27, 2016 for purposes of considering a potential debt refinancing, pursuant to which the Company intends to enter into a new term loan B facility in an amount of approximately $350,000,000 and a revolving line of credit facility in an amount of approximately $150,000,000 (the “Potential Refinancing”). The proceeds of the Potential Refinancing, if effected, would be used for the redemption of all of the Company’s outstanding 7.75% Senior Subordinated Notes due 2019 (the “Senior Subordinated Notes”), the repayment in full of the Company’s existing senior secured asset-based revolving credit and letter of credit facility, which matures on February 26, 2020 (or November 2018 if the Senior Subordinated Notes are not refinanced by then), transaction related fees and expenses, working capital and other purposes. The timing, size and terms of the Potential Refinancing and the use of proceeds thereof are subject to market and other conditions, and the Company makes no assurance that such actions will take place at any specific time, or at all.

In conjunction with the Potential Refinancing, the Company will provide the following updated guidance for the year ending December 31, 2016 to prospective lenders:


Given the Company’s strong pricing and operational performance during the first two months of the third quarter, the Company is increasing its Adjusted EBITDA* guidance for the year ending December 31, 2016 by estimating results in the following range:

  • Adjusted EBITDA between $115 million and $117 million (increased from a range of $111 million to $115 million as first announced on March 1, 2016).

The Company reaffirms its Revenue guidance and has established Normalized Free Cash Flow* guidance for the year by estimating results in the following ranges:

  • Revenues between $550 million and $560 million; and
  • Normalized Free Cash Flow between $20 million and $24 million.

The Company has shifted from the previously announced Free Cash Flow guidance to Normalized Free Cash Flow guidance to eliminate the impact of cash interest timing differences related to the Potential Refinancing.

The Company does not provide reconciling information for forward-looking periods because such information is not available without an unreasonable effort. The Company believes that such information is not significant to an understanding of its non-GAAP financial measures for forward-looking periods because its methodology for calculating such non-GAAP financial measures is based on sensitivity analysis compared to budget at the business unit level rather than on differences from GAAP financial measures.

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