Casella Waste Systems (CWST) Prelim. Q3 Revenue Outpaces Views

Casella Waste Systems (NASDAQ: CWST) reported preliminary results for the three month period ended September 30, 2015.

Third Quarter Preliminary Financial Highlights:

• Revenues were $146.2 million, up $4.3 million, or 3.0%, from the same period in 2014.
• Operating Income was $12.7 million, up $2.1 million, or 19.5%, from the same period in 2014.
• Adjusted EBITDA* was $33.1 million, up $2.4 million, or 7.8%, from the same period in 2014.
• Net income attributable to common stockholders was $2.3 million, up $1.2 million, or 112.6%, from the same period in 2014.
• Free Cash Flow* was $0.8 million, up $7.0 million from the same period in 2014.

*** The Street was looking for Q3 revenue of $142.5 million and EPS of $0.08.

“During our third quarter, we continued to execute well against our key strategies of increasing landfill returns, improving collection route profitability, creating incremental value through resource solutions, reducing financial and operational risks, and improving our balance sheet,” said John W. Casella, Chairman and CEO of Casella Waste Systems.

“As a result, we continued to expand Adjusted EBITDA margins, up roughly 100 bps year-over-year, and we used positive free cash flow generated on a year-to-date basis to permanently repay debt during the quarter,” Casella said. “We repurchased and permanently retired $9.7 million of our 7.75% Senior Subordinated Notes due 2019 during the quarter, demonstrating our commitment to reduce leverage and accelerate free cash flow generation by retiring our highest cost debt.”

“From an operating standpoint, our solid waste pricing programs continued to gain traction in the quarter with overall solid waste pricing up 2.9%, driven by strong residential and commercial pricing up 5.2% and higher pricing in the disposal line-of-business,” Casella said. “These strong pricing gains were complemented by further improvements in our operating efficiency programs and our continued success implementing the Sustainability Recycling Adjustment (SRA) fee to offset lower recycling commodity prices.”

2015 Outlook

Given the solid performance year-to-date, the company reaffirms its previously provided guidance for the year ending December 31, 2015 by estimating results in the following ranges:

• Revenues between $525 million and $535 million;
• Adjusted EBITDA* between $103 million and $107 million; and
• Free Cash Flow* between $15 million and $19 million.

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