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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Casella Waste Systems Inc | NASDAQ:CWST | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 105.26 | 104.61 | 126.00 | 0 | 09:05:30 |
|
|
|
ý
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
Delaware
|
03-0338873
|
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification No.)
|
25 Greens Hill Lane, Rutland, Vermont
|
05701
|
(Address of principal executive offices)
|
(Zip Code)
|
|
Large accelerated filer
|
ý
|
Accelerated filer
|
¨
|
Non-accelerated filer
|
¨
|
Smaller reporting company
|
¨
|
|
|
Emerging growth company
|
¨
|
Class A common stock, $0.01 par value per share:
|
46,252,010
|
|
|
Class B common stock, $0.01 par value per share:
|
988,200
|
|
|
|
ITEM 1.
|
FINANCIAL STATEMENTS
|
|
March 31,
2019 |
|
December 31,
2018 |
||||
|
(Unaudited)
|
|
|
||||
ASSETS
|
|||||||
CURRENT ASSETS:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
19,936
|
|
|
$
|
4,007
|
|
Accounts receivable - trade, net of allowance for doubtful accounts of $921 and $931, respectively
|
72,243
|
|
|
74,937
|
|
||
Refundable income taxes
|
2,464
|
|
|
2,254
|
|
||
Prepaid expenses
|
6,730
|
|
|
7,345
|
|
||
Inventory
|
6,793
|
|
|
6,542
|
|
||
Other current assets
|
987
|
|
|
2,008
|
|
||
Total current assets
|
109,153
|
|
|
97,093
|
|
||
Property, plant and equipment, net of accumulated depreciation and amortization of $802,527 and $878,701, respectively
|
379,372
|
|
|
404,577
|
|
||
Right-of-use asset - operating leases
|
106,932
|
|
|
—
|
|
||
Goodwill
|
162,734
|
|
|
162,734
|
|
||
Intangible assets, net
|
33,366
|
|
|
34,767
|
|
||
Restricted assets
|
1,345
|
|
|
1,248
|
|
||
Cost method investments
|
11,264
|
|
|
11,264
|
|
||
Deferred income taxes
|
9,472
|
|
|
9,594
|
|
||
Other non-current assets
|
14,675
|
|
|
11,133
|
|
||
Total assets
|
$
|
828,313
|
|
|
$
|
732,410
|
|
|
Three Months Ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
Revenues
|
$
|
163,664
|
|
|
$
|
147,455
|
|
Operating expenses:
|
|
|
|
||||
Cost of operations
|
117,759
|
|
|
105,610
|
|
||
General and administration
|
22,742
|
|
|
21,027
|
|
||
Depreciation and amortization
|
17,489
|
|
|
15,983
|
|
||
Expense from acquisition activities and other items
|
677
|
|
|
—
|
|
||
Southbridge Landfill closure charge, net
|
555
|
|
|
1,586
|
|
||
Contract settlement charge
|
—
|
|
|
2,100
|
|
||
Development project charge
|
—
|
|
|
311
|
|
||
|
159,222
|
|
|
146,617
|
|
||
Operating income
|
4,442
|
|
|
838
|
|
||
Other expense (income):
|
|
|
|
||||
Interest income
|
(117
|
)
|
|
(29
|
)
|
||
Interest expense
|
6,460
|
|
|
6,454
|
|
||
Other income
|
(216
|
)
|
|
(89
|
)
|
||
Other expense, net
|
6,127
|
|
|
6,336
|
|
||
Loss before income taxes
|
(1,685
|
)
|
|
(5,498
|
)
|
||
Provision (benefit) for income taxes
|
29
|
|
|
(1,588
|
)
|
||
Net loss
|
$
|
(1,714
|
)
|
|
$
|
(3,910
|
)
|
Basic and diluted earnings per share attributable to common stockholders:
|
|
|
|
||||
Weighted average common shares outstanding
|
45,913
|
|
|
42,370
|
|
||
Basic and diluted earnings per common share
|
$
|
(0.04
|
)
|
|
$
|
(0.09
|
)
|
|
Three Months Ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
Net loss
|
$
|
(1,714
|
)
|
|
$
|
(3,910
|
)
|
Other comprehensive income (loss), before tax:
|
|
|
|
||||
Hedging activity:
|
|
|
|
||||
Interest rate swap settlements
|
(28
|
)
|
|
(61
|
)
|
||
Interest rate swap amounts reclassified into interest expense
|
25
|
|
|
53
|
|
||
Unrealized (loss) gain resulting from changes in fair value of derivative instruments
|
(1,554
|
)
|
|
785
|
|
||
Other comprehensive (loss) income, before tax
|
(1,557
|
)
|
|
777
|
|
||
Income tax provision related to items of other comprehensive (loss) income
|
—
|
|
|
209
|
|
||
Other comprehensive (loss) income, net of tax
|
(1,557
|
)
|
|
568
|
|
||
Comprehensive loss
|
$
|
(3,271
|
)
|
|
$
|
(3,342
|
)
|
|
|
|
Class A
Common Stock
|
|
Class B
Common Stock
|
|
Additional Paid-In Capital
|
|
Accumulated Deficit
|
|
Accumulated Other
Comprehensive Loss |
||||||||||||||||||
|
Total
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|
|
|||||||||||||||||
Balance, December 31, 2018
|
$
|
(15,832
|
)
|
|
41,944
|
|
|
$
|
419
|
|
|
988
|
|
|
$
|
10
|
|
|
$
|
373,716
|
|
|
$
|
(388,669
|
)
|
|
$
|
(1,308
|
)
|
Issuance of Class A common stock - equity offering
|
100,446
|
|
|
3,565
|
|
|
36
|
|
|
—
|
|
|
—
|
|
|
100,410
|
|
|
—
|
|
|
—
|
|
||||||
Issuance of Class A common stock - acquisition
|
—
|
|
|
67
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
||||||
Issuances of Class A common stock
|
260
|
|
|
676
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
253
|
|
|
—
|
|
|
—
|
|
||||||
Stock-based compensation
|
1,431
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,431
|
|
|
—
|
|
|
—
|
|
||||||
Comprehensive loss:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net loss
|
(1,714
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,714
|
)
|
|
—
|
|
||||||
Other comprehensive loss:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Hedging activity
|
(1,557
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,557
|
)
|
||||||
Balance, March 31, 2019
|
$
|
83,034
|
|
|
46,252
|
|
|
$
|
463
|
|
|
988
|
|
|
$
|
10
|
|
|
$
|
475,809
|
|
|
$
|
(390,383
|
)
|
|
$
|
(2,865
|
)
|
|
|
|
Class A
Common Stock
|
|
Class B
Common Stock
|
|
Additional Paid-In Capital
|
|
Accumulated Deficit
|
|
Accumulated Other
Comprehensive Income |
||||||||||||||||||
|
Total
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|
|
|||||||||||||||||
Balance, December 31, 2017
|
$
|
(37,862
|
)
|
|
41,298
|
|
|
$
|
413
|
|
|
988
|
|
|
$
|
10
|
|
|
$
|
356,638
|
|
|
$
|
(395,107
|
)
|
|
$
|
184
|
|
Cumulative effect of new accounting principle
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18
|
|
|
(18
|
)
|
||||||
Issuances of Class A common stock
|
310
|
|
|
402
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
306
|
|
|
—
|
|
|
—
|
|
||||||
Stock-based compensation
|
2,077
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,077
|
|
|
—
|
|
|
—
|
|
||||||
Comprehensive loss:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net loss
|
(3,910
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,910
|
)
|
|
—
|
|
||||||
Other comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Hedging activity
|
568
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
568
|
|
||||||
Balance, March 31, 2018
|
$
|
(38,817
|
)
|
|
41,700
|
|
|
$
|
417
|
|
|
988
|
|
|
$
|
10
|
|
|
$
|
359,021
|
|
|
$
|
(398,999
|
)
|
|
$
|
734
|
|
|
Three Months Ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
Cash Flows from Operating Activities:
|
|
|
|
||||
Net loss
|
$
|
(1,714
|
)
|
|
$
|
(3,910
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
17,489
|
|
|
15,983
|
|
||
Depletion of landfill operating lease obligations
|
1,648
|
|
|
2,392
|
|
||
Interest accretion on landfill and environmental remediation liabilities
|
1,804
|
|
|
1,422
|
|
||
Amortization of debt issuance costs and discount on long-term debt
|
575
|
|
|
689
|
|
||
Stock-based compensation
|
1,431
|
|
|
2,077
|
|
||
Gain on sale of property and equipment
|
(57
|
)
|
|
(283
|
)
|
||
Southbridge Landfill non-cash closure charge
|
—
|
|
|
1,403
|
|
||
Development project charge
|
—
|
|
|
311
|
|
||
Non-cash expense from acquisition activities and other items
|
14
|
|
|
—
|
|
||
Right-of-use asset - operating lease expense
|
2,579
|
|
|
—
|
|
||
Deferred income taxes
|
188
|
|
|
(1,187
|
)
|
||
Changes in assets and liabilities, net of effects of acquisitions and divestitures:
|
|
|
|
||||
Accounts receivable
|
2,694
|
|
|
1,242
|
|
||
Accounts payable
|
(7,904
|
)
|
|
1,405
|
|
||
Prepaid expenses, inventories and other assets
|
(3,430
|
)
|
|
(504
|
)
|
||
Accrued expenses, contract liabilities and other liabilities
|
(10,540
|
)
|
|
(8,246
|
)
|
||
Net cash provided by operating activities
|
4,777
|
|
|
12,794
|
|
||
Cash Flows from Investing Activities:
|
|
|
|
||||
Acquisitions, net of cash acquired
|
(1,222
|
)
|
|
(18,958
|
)
|
||
Additions to property, plant and equipment
|
(18,243
|
)
|
|
(8,918
|
)
|
||
Payments on landfill operating lease contracts
|
—
|
|
|
(509
|
)
|
||
Proceeds from sale of property and equipment
|
57
|
|
|
342
|
|
||
Net cash used in investing activities
|
(19,408
|
)
|
|
(28,043
|
)
|
||
Cash Flows from Financing Activities:
|
|
|
|
||||
Proceeds from long-term borrowings
|
10,600
|
|
|
66,700
|
|
||
Principal payments on long-term debt
|
(80,746
|
)
|
|
(51,364
|
)
|
||
Proceeds from the exercise of share based awards
|
260
|
|
|
310
|
|
||
Proceeds from the issuance of Class A Common Stock
|
100,446
|
|
|
—
|
|
||
Net cash provided by financing activities
|
30,560
|
|
|
15,646
|
|
||
Net increase in cash and cash equivalents
|
15,929
|
|
|
397
|
|
||
Cash and cash equivalents, beginning of period
|
4,007
|
|
|
1,995
|
|
||
Cash and cash equivalents, end of period
|
$
|
19,936
|
|
|
$
|
2,392
|
|
Supplemental Disclosure of Cash Flow Information:
|
|
|
|
||||
Cash paid during the period for:
|
|
|
|
||||
Interest
|
$
|
5,718
|
|
|
$
|
5,547
|
|
Income taxes, net of refunds
|
$
|
51
|
|
|
$
|
36
|
|
Supplemental Disclosure of Non-Cash Investing and Financing Activities:
|
|
|
|
||||
Non-current assets obtained through long-term obligations
|
$
|
2,473
|
|
|
$
|
1,444
|
|
1.
|
BASIS OF PRESENTATION
|
2.
|
ACCOUNTING CHANGES
|
3.
|
REVENUE RECOGNITION
|
|
Eastern
|
|
Western
|
|
Recycling
|
|
Other
|
|
Total Revenues
|
||||||||||
Collection
|
$
|
33,965
|
|
|
$
|
49,597
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
83,562
|
|
Landfill
|
3,717
|
|
|
15,468
|
|
|
—
|
|
|
—
|
|
|
19,185
|
|
|||||
Transfer
|
8,986
|
|
|
5,275
|
|
|
—
|
|
|
—
|
|
|
14,261
|
|
|||||
Customer solutions
|
—
|
|
|
—
|
|
|
—
|
|
|
18,154
|
|
|
18,154
|
|
|||||
Recycling
|
—
|
|
|
441
|
|
|
10,766
|
|
|
—
|
|
|
11,207
|
|
|||||
Organics
|
—
|
|
|
—
|
|
|
—
|
|
|
13,596
|
|
|
13,596
|
|
|||||
Transportation
|
—
|
|
|
2,046
|
|
|
—
|
|
|
517
|
|
|
2,563
|
|
|||||
Landfill gas-to-energy
|
329
|
|
|
807
|
|
|
—
|
|
|
—
|
|
|
1,136
|
|
|||||
Total revenues
|
$
|
46,997
|
|
|
$
|
73,634
|
|
|
$
|
10,766
|
|
|
$
|
32,267
|
|
|
$
|
163,664
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Transferred at a point-in-time
|
$
|
36
|
|
|
$
|
309
|
|
|
$
|
6,124
|
|
|
$
|
267
|
|
|
$
|
6,736
|
|
Transferred over time
|
46,961
|
|
|
73,325
|
|
|
4,642
|
|
|
32,000
|
|
|
156,928
|
|
|||||
Total revenues
|
$
|
46,997
|
|
|
$
|
73,634
|
|
|
$
|
10,766
|
|
|
$
|
32,267
|
|
|
$
|
163,664
|
|
|
Eastern
|
|
Western
|
|
Recycling
|
|
Other
|
|
Total Revenues
|
||||||||||
Collection
|
$
|
30,523
|
|
|
$
|
36,484
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
67,007
|
|
Landfill
|
5,960
|
|
|
14,540
|
|
|
—
|
|
|
—
|
|
|
20,500
|
|
|||||
Transfer
|
7,560
|
|
|
5,606
|
|
|
—
|
|
|
—
|
|
|
13,166
|
|
|||||
Customer solutions
|
—
|
|
|
—
|
|
|
—
|
|
|
15,170
|
|
|
15,170
|
|
|||||
Recycling
|
—
|
|
|
948
|
|
|
10,157
|
|
|
—
|
|
|
11,105
|
|
|||||
Organics
|
—
|
|
|
—
|
|
|
—
|
|
|
12,200
|
|
|
12,200
|
|
|||||
Transportation
|
—
|
|
|
5,824
|
|
|
—
|
|
|
684
|
|
|
6,508
|
|
|||||
Landfill gas-to-energy
|
462
|
|
|
1,337
|
|
|
—
|
|
|
—
|
|
|
1,799
|
|
|||||
Total revenues
|
$
|
44,505
|
|
|
$
|
64,739
|
|
|
$
|
10,157
|
|
|
$
|
28,054
|
|
|
$
|
147,455
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Transferred at a point-in-time
|
$
|
191
|
|
|
$
|
368
|
|
|
$
|
7,257
|
|
|
$
|
357
|
|
|
$
|
8,173
|
|
Transferred over time
|
44,314
|
|
|
64,371
|
|
|
2,900
|
|
|
27,697
|
|
|
139,282
|
|
|||||
Total revenues
|
$
|
44,505
|
|
|
$
|
64,739
|
|
|
$
|
10,157
|
|
|
$
|
28,054
|
|
|
$
|
147,455
|
|
4.
|
LEASES
|
|
Three Months Ended
March 31, 2019 |
||
Lease cost:
|
|
||
Finance lease cost:
|
|
||
Amortization of right-of-use assets
|
$
|
409
|
|
Interest expense
|
156
|
|
|
Operating lease cost:
|
|
||
Fixed lease cost
|
4,227
|
|
|
Short-term lease cost
|
658
|
|
|
Variable lease cost
|
7
|
|
|
Total lease cost
|
$
|
5,457
|
|
|
|
||
Other information:
|
|
||
Cash paid for amounts included in the measurement of lease liabilities:
|
|
||
Financing cash flows for finance leases
|
$
|
471
|
|
Operating cash flows for operating leases
|
$
|
2,043
|
|
Right-of-use assets obtained in exchange for new finance lease liabilities
|
$
|
2,473
|
|
Right-of-use assets obtained in exchange for new operating lease liabilities
|
$
|
415
|
|
Weighted-average remaining lease term - finance leases (years)
|
7.0
|
|
|
Weighted-average remaining lease term - operating leases (years)
|
11.3
|
|
|
Weighted-average discount rate - finance leases
|
5.3
|
%
|
|
Weighted-average discount rate - operating leases
|
6.5
|
%
|
|
Operating Leases
|
|
Finance Leases
|
||||
Fiscal year ending December 31, 2019
|
$
|
12,160
|
|
|
$
|
2,257
|
|
Fiscal year ending December 31, 2020
|
12,845
|
|
|
3,171
|
|
||
Fiscal year ending December 31, 2021
|
10,394
|
|
|
2,634
|
|
||
Fiscal year ending December 31, 2022
|
8,236
|
|
|
2,039
|
|
||
Fiscal year ending December 31, 2023
|
6,488
|
|
|
1,871
|
|
||
Thereafter
|
65,269
|
|
|
4,816
|
|
||
Total lease payments
|
115,392
|
|
|
16,788
|
|
||
Less: interest expense
|
(37,768
|
)
|
|
(3,284
|
)
|
||
Lease liability balance
|
$
|
77,624
|
|
|
$
|
13,504
|
|
|
|
|
|
|
|
|
Covenants
Not-to-Compete
|
|
Client Lists
|
|
Total
|
||||||
Balance, March 31, 2019
|
|
|
|
|
|
||||||
Intangible assets
|
$
|
21,750
|
|
|
$
|
44,363
|
|
|
$
|
66,113
|
|
Less accumulated amortization
|
(17,820
|
)
|
|
(14,927
|
)
|
|
(32,747
|
)
|
|||
|
$
|
3,930
|
|
|
$
|
29,436
|
|
|
$
|
33,366
|
|
|
Covenants
Not-to-Compete
|
|
Client Lists
|
|
Total
|
||||||
Balance, December 31, 2018
|
|
|
|
|
|
||||||
Intangible assets
|
$
|
21,750
|
|
|
$
|
44,363
|
|
|
$
|
66,113
|
|
Less accumulated amortization
|
(17,584
|
)
|
|
(13,762
|
)
|
|
(31,346
|
)
|
|||
|
$
|
4,166
|
|
|
$
|
30,601
|
|
|
$
|
34,767
|
|
|
Three Months Ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
Beginning balance
|
$
|
73,075
|
|
|
$
|
62,290
|
|
Obligations incurred
|
543
|
|
|
798
|
|
||
Revision in estimates (1)
|
—
|
|
|
1,492
|
|
||
Accretion expense
|
1,607
|
|
|
1,383
|
|
||
Obligations settled (2)
|
(1,556
|
)
|
|
(297
|
)
|
||
Ending balance
|
$
|
73,669
|
|
|
$
|
65,666
|
|
(1)
|
Relates to changes in estimates and assumptions associated with anticipated costs of future final capping, closure and post-closure activities at the Town of Southbridge, Massachusetts landfill. See Note 8,
Commitments and Contingencies
and Note 11,
Other Items and Charges
for additional disclosure regarding the matter.
|
(2)
|
Includes amounts that are being processed through accounts payable as a part of our disbursements cycle.
|
|
March 31,
2019 |
|
December 31,
2018 |
||||
Senior Secured Credit Facility:
|
|
|
|
||||
Revolving line of credit facility ("Revolving Credit Facility") due May 2023; bearing interest at LIBOR plus 2.00%
|
$
|
—
|
|
|
$
|
69,600
|
|
Term loan A facility ("Term Loan Facility") due May 2023; bearing interest at LIBOR plus 2.00%
|
350,000
|
|
|
350,000
|
|
||
Tax-Exempt Bonds:
|
|
|
|
||||
New York State Environmental Facilities Corporation Solid Waste Disposal Revenue Bonds Series 2014 ("New York Bonds 2014") due December 2044 - fixed rate interest period through 2019; bearing interest at 3.75%
|
25,000
|
|
|
25,000
|
|
||
New York State Environmental Facilities Corporation Solid Waste Disposal Revenue Bonds Series 2014R-2 ("New York Bonds 2014R-2") due December 2044 - fixed rate interest period through 2026; bearing interest at 3.125%
|
15,000
|
|
|
15,000
|
|
||
Finance Authority of Maine Solid Waste Disposal Revenue Bonds Series 2005R-3 ("FAME Bonds 2005R-3") due January 2025 - fixed rate interest period through 2025; bearing interest at 5.25%
|
25,000
|
|
|
25,000
|
|
||
Finance Authority of Maine Solid Waste Disposal Revenue Bonds Series 2015R-1 ("FAME Bonds 2015R-1") due August 2035 - fixed rate interest period through 2025; bearing interest at 5.125%
|
15,000
|
|
|
15,000
|
|
||
Finance Authority of Maine Solid Waste Disposal Revenue Bonds Series 2015R-2 ("FAME Bonds 2015R-2") due August 2035 - fixed rate interest period through 2025; bearing interest at 4.375%
|
15,000
|
|
|
15,000
|
|
||
Vermont Economic Development Authority Solid Waste Disposal Long-Term Revenue Bonds Series 2013 ("Vermont Bonds") due April 2036 - fixed rate interest period through 2028; bearing interest at 4.625%
|
16,000
|
|
|
16,000
|
|
||
Business Finance Authority of the State of New Hampshire Solid Waste Disposal Revenue Bonds Series 2013 ("New Hampshire Bonds") due April 2029 - fixed rate interest period through 2019; bearing interest at 4.00%
|
11,000
|
|
|
11,000
|
|
||
Other:
|
|
|
|
||||
Finance leases maturing through December 2107; bearing interest at a weighted average of 5.3%
|
13,504
|
|
|
11,248
|
|
||
Notes payable maturing through June 2027; bearing interest at a weighted average of 2.90%
|
2,298
|
|
|
2,401
|
|
||
Principal amount of long-term debt and finance leases
|
487,802
|
|
|
555,249
|
|
||
Less—unamortized discount and debt issuance costs (1)
|
10,375
|
|
|
10,950
|
|
||
Long-term debt and finance leases less unamortized discount and debt issuance costs
|
477,427
|
|
|
544,299
|
|
||
Less—current maturities of long-term debt and finance leases
|
2,694
|
|
|
2,298
|
|
||
|
$
|
474,733
|
|
|
$
|
542,001
|
|
(1)
|
A summary of unamortized discount and debt issuance costs by debt instrument follows:
|
|
March 31,
2019 |
|
December 31,
2018 |
||||
Revolving Credit Facility and Term Loan Facility (collectively, the "Credit Facility")
|
$
|
6,708
|
|
|
$
|
7,118
|
|
New York Bonds 2014
|
801
|
|
|
847
|
|
||
New York Bonds 2014R-2
|
435
|
|
|
450
|
|
||
FAME Bonds 2005R-3
|
496
|
|
|
517
|
|
||
FAME Bonds 2015R-1
|
604
|
|
|
622
|
|
||
FAME Bonds 2015R-2
|
474
|
|
|
493
|
|
||
Vermont Bonds
|
581
|
|
|
595
|
|
||
New Hampshire Bonds
|
276
|
|
|
308
|
|
||
|
$
|
10,375
|
|
|
$
|
10,950
|
|
|
|
|
Fair Value
|
||||||
|
Balance Sheet Location
|
|
March 31,
2019 |
|
December 31,
2018 |
||||
Interest rate swaps
|
Other current assets
|
|
$
|
260
|
|
|
$
|
338
|
|
Interest rate swaps
|
Other non-current assets
|
|
152
|
|
|
482
|
|
||
|
|
|
$
|
412
|
|
|
$
|
820
|
|
|
|
|
|
|
|
||||
Interest rate swaps
|
Other accrued liabilities
|
|
$
|
579
|
|
|
$
|
387
|
|
Interest rate swaps
|
Other long-term liabilities
|
|
2,433
|
|
|
1,555
|
|
||
|
|
|
$
|
3,012
|
|
|
$
|
1,942
|
|
|
|
|
|
|
|
||||
Interest rate swaps
|
Accumulated other comprehensive loss
|
|
$
|
(2,753
|
)
|
|
$
|
(1,196
|
)
|
Interest rate swaps - tax provision
|
Accumulated other comprehensive loss
|
|
(112
|
)
|
|
(112
|
)
|
||
|
|
|
$
|
(2,865
|
)
|
|
$
|
(1,308
|
)
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2019
|
|
2018
|
||||
Statement of Operations Location
|
|
(Expense) Income
|
||||||
Interest expense
|
|
$
|
(25
|
)
|
|
$
|
(53
|
)
|
|
Three Months Ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
Beginning balance
|
$
|
5,173
|
|
|
$
|
5,936
|
|
Accretion expense
|
34
|
|
|
39
|
|
||
Obligations settled (1)
|
(141
|
)
|
|
(237
|
)
|
||
Ending balance
|
$
|
5,066
|
|
|
$
|
5,738
|
|
(1)
|
Includes amounts that are being processed through accounts payable as a part of our disbursements cycle.
|
9.
|
STOCKHOLDERS' EQUITY
|
|
Stock Options (1)
|
|
Weighted Average Exercise Price
|
|
Weighted Average Remaining Contractual Term (years)
|
|
Aggregate Intrinsic Value
|
|||||
Outstanding, December 31, 2018
|
669
|
|
|
$
|
6.37
|
|
|
|
|
|
||
Granted
|
—
|
|
|
$
|
—
|
|
|
|
|
|
||
Exercised
|
(65
|
)
|
|
$
|
4.00
|
|
|
|
|
|
||
Forfeited
|
—
|
|
|
$
|
—
|
|
|
|
|
|
||
Outstanding, March 31, 2019
|
604
|
|
|
$
|
6.62
|
|
|
5.5
|
|
$
|
17,463
|
|
Exercisable, March 31, 2019
|
604
|
|
|
$
|
6.62
|
|
|
5.5
|
|
$
|
17,463
|
|
|
Restricted Stock, Restricted Stock Units, and Performance Stock Units (1)
|
|
Weighted
Average Grant Date Fair
Value
|
|
Weighted Average Remaining Contractual Term (years)
|
|
Aggregate Intrinsic Value
|
|||||
Outstanding, December 31, 2018
|
686
|
|
|
$
|
15.56
|
|
|
|
|
|
||
Granted
|
66
|
|
|
$
|
34.49
|
|
|
|
|
|
||
Class A Common Stock Vested
|
(194
|
)
|
|
$
|
10.75
|
|
|
|
|
|
||
Forfeited
|
(4
|
)
|
|
$
|
15.21
|
|
|
|
|
|
||
Outstanding, March 31, 2019
|
554
|
|
|
$
|
19.54
|
|
|
1.4
|
|
$
|
8,873
|
|
Unvested, March 31, 2019
|
819
|
|
|
$
|
18.71
|
|
|
1.3
|
|
$
|
13,796
|
|
(1)
|
Market-based performance stock unit grants are included at the
100%
attainment level. Attainment of the maximum performance targets and market achievements would result in the issuance of an additional
265
shares of Class A common stock currently included in unvested.
|
|
|
||
|
Interest Rate Swaps
|
||
Balance, December 31, 2018
|
$
|
(1,308
|
)
|
Other comprehensive loss before reclassifications
|
(1,582
|
)
|
|
Amounts reclassified from accumulated other comprehensive loss
|
25
|
|
|
Income tax expense related to items of other comprehensive loss
|
—
|
|
|
Net current-period other comprehensive loss
|
(1,557
|
)
|
|
Balance, March 31, 2019
|
$
|
(2,865
|
)
|
|
|
Three Months Ended
March 31, |
|
|
||||||
|
|
2019
|
|
2018
|
|
|
||||
Details About Accumulated Other Comprehensive Loss Components
|
|
Amounts Reclassified Out of Accumulated Other Comprehensive Loss
|
|
Affected Line Item in the Consolidated
Statements of Operations
|
||||||
Interest rate swaps
|
|
$
|
25
|
|
|
$
|
53
|
|
|
Interest expense
|
|
|
25
|
|
|
53
|
|
|
Loss before income taxes
|
||
|
|
—
|
|
|
209
|
|
|
Provision (benefit) for income taxes
|
||
|
|
$
|
25
|
|
|
$
|
(156
|
)
|
|
Net loss
|
10.
|
EARNINGS PER SHARE
|
|
Three Months Ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
Numerator:
|
|
|
|
||||
Net loss
|
$
|
(1,714
|
)
|
|
$
|
(3,910
|
)
|
Denominators:
|
|
|
|
||||
Number of shares outstanding, end of period:
|
|
|
|
||||
Class A common stock
|
46,252
|
|
|
41,700
|
|
||
Class B common stock
|
988
|
|
|
988
|
|
||
Shares to be issued - acquisition
|
36
|
|
|
—
|
|
||
Unvested restricted stock
|
(9
|
)
|
|
(38
|
)
|
||
Effect of weighted average shares outstanding
|
(1,354
|
)
|
|
(280
|
)
|
||
Basic and diluted weighted average common shares outstanding
|
45,913
|
|
|
42,370
|
|
||
Anti-dilutive potentially issuable shares
|
1,422
|
|
|
2,105
|
|
|
Three Months Ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
Charlton settlement charge (1)
|
$
|
—
|
|
|
$
|
1,216
|
|
Legal and other costs (2)
|
555
|
|
|
370
|
|
||
Southbridge Landfill closure charge, net
|
$
|
555
|
|
|
$
|
1,586
|
|
(1)
|
We established a reserve associated with settlement of the Town of Charlton's claim against us. See Note 8,
Commitments and Contingencies
for additional disclosure.
|
(2)
|
We incurred legal costs as well as other costs associated with various matters as part of the Southbridge Landfill closure. See Note 8,
Commitments and Contingencies
for additional disclosure.
|
12.
|
FAIR VALUE OF FINANCIAL INSTRUMENTS
|
|
Fair Value Measurement at March 31, 2019 Using:
|
||||||||||
|
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
|
|
Significant Other
Observable Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||
Assets:
|
|
|
|
|
|
||||||
Restricted investment securities - landfill closure
|
$
|
1,345
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest rate swaps
|
—
|
|
|
412
|
|
|
—
|
|
|||
|
$
|
1,345
|
|
|
$
|
412
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
||||||
Interest rate swaps
|
$
|
—
|
|
|
$
|
3,012
|
|
|
$
|
—
|
|
13.
|
SEGMENT REPORTING
|
Segment
|
|
Outside
revenues
|
|
Inter-company
revenue
|
|
Depreciation and
amortization
|
|
Operating
income (loss)
|
|
Total
assets
|
||||||||||
Eastern
|
|
$
|
46,997
|
|
|
$
|
10,771
|
|
|
$
|
5,260
|
|
|
$
|
(626
|
)
|
|
$
|
195,851
|
|
Western
|
|
73,634
|
|
|
20,101
|
|
|
10,239
|
|
|
5,356
|
|
|
493,775
|
|
|||||
Recycling
|
|
10,766
|
|
|
1,971
|
|
|
969
|
|
|
(941
|
)
|
|
54,829
|
|
|||||
Other
|
|
32,267
|
|
|
533
|
|
|
1,021
|
|
|
653
|
|
|
83,858
|
|
|||||
Eliminations
|
|
—
|
|
|
(33,376
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
|
|
$
|
163,664
|
|
|
$
|
—
|
|
|
$
|
17,489
|
|
|
$
|
4,442
|
|
|
$
|
828,313
|
|
Segment
|
|
Outside
revenues
|
|
Inter-company
revenue
|
|
Depreciation and
amortization
|
|
Operating
income (loss)
|
|
Total
assets
|
||||||||||
Eastern
|
|
$
|
44,505
|
|
|
$
|
11,306
|
|
|
$
|
5,979
|
|
|
$
|
(1,812
|
)
|
|
$
|
174,860
|
|
Western
|
|
64,739
|
|
|
18,631
|
|
|
8,032
|
|
|
7,194
|
|
|
342,285
|
|
|||||
Recycling
|
|
10,157
|
|
|
1,185
|
|
|
1,054
|
|
|
(5,167
|
)
|
|
47,065
|
|
|||||
Other
|
|
28,054
|
|
|
317
|
|
|
918
|
|
|
623
|
|
|
67,165
|
|
|||||
Eliminations
|
|
—
|
|
|
(31,439
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
|
|
$
|
147,455
|
|
|
$
|
—
|
|
|
$
|
15,983
|
|
|
$
|
838
|
|
|
$
|
631,375
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
Collection
|
$
|
83,080
|
|
|
$
|
66,475
|
|
Disposal
|
36,054
|
|
|
40,234
|
|
||
Power generation
|
1,136
|
|
|
1,799
|
|
||
Processing
|
878
|
|
|
1,420
|
|
||
Solid waste operations
|
121,148
|
|
|
109,928
|
|
||
Organics
|
13,596
|
|
|
12,200
|
|
||
Customer solutions
|
18,154
|
|
|
15,170
|
|
||
Recycling
|
10,766
|
|
|
10,157
|
|
||
Total revenues
|
$
|
163,664
|
|
|
$
|
147,455
|
|
ITEM 2.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
expected liquidity and financing plans;
|
•
|
expected future revenues, operations, expenditures and cash needs;
|
•
|
fluctuations in commodity pricing of our recyclables, increases in landfill tipping fees and fuel costs and general economic and weather conditions;
|
•
|
projected future obligations related to final capping, closure and post-closure costs of our existing landfills and any disposal facilities which we may own or operate in the future;
|
•
|
our ability to use our net operating losses and tax positions;
|
•
|
our ability to service our debt obligations;
|
•
|
the projected development of additional disposal capacity or expectations regarding permits for existing capacity;
|
•
|
the recoverability or impairment of any of our assets or goodwill;
|
•
|
estimates of the potential markets for our products and services, including the anticipated drivers for future growth;
|
•
|
sales and marketing plans or price and volume assumptions;
|
•
|
the outcome of any legal or regulatory matter;
|
•
|
potential business combinations or divestitures; and
|
•
|
projected improvements to our infrastructure and the impact of such improvements on our business and operations.
|
|
Three Months Ended March 31,
|
|
$
Change
|
||||||||||||||
|
2019
|
|
2018
|
|
|||||||||||||
Collection
|
$
|
83.1
|
|
|
50.8
|
%
|
|
$
|
66.5
|
|
|
45.1
|
%
|
|
$
|
16.6
|
|
Disposal
|
36.1
|
|
|
22.0
|
%
|
|
40.2
|
|
|
27.3
|
%
|
|
(4.1
|
)
|
|||
Power
|
1.1
|
|
|
0.7
|
%
|
|
1.8
|
|
|
1.2
|
%
|
|
(0.7
|
)
|
|||
Processing
|
0.8
|
|
|
0.5
|
%
|
|
1.4
|
|
|
1.0
|
%
|
|
(0.6
|
)
|
|||
Solid waste
|
121.1
|
|
|
74.0
|
%
|
|
109.9
|
|
|
74.6
|
%
|
|
11.2
|
|
|||
Organics
|
13.6
|
|
|
8.3
|
%
|
|
12.2
|
|
|
8.2
|
%
|
|
1.4
|
|
|||
Customer solutions
|
18.2
|
|
|
11.1
|
%
|
|
15.2
|
|
|
10.3
|
%
|
|
3.0
|
|
|||
Recycling
|
10.8
|
|
|
6.6
|
%
|
|
10.2
|
|
|
6.9
|
%
|
|
0.6
|
|
|||
Total revenues
|
$
|
163.7
|
|
|
100.0
|
%
|
|
$
|
147.5
|
|
|
100.0
|
%
|
|
$
|
16.2
|
|
|
Period-to-Period
Change for the Three Months Ended March 31, 2019 vs. 2018 |
|||||
|
Amount
|
|
% of Growth
|
|||
Price
|
$
|
5.5
|
|
|
5.0
|
%
|
Volume
|
(4.4
|
)
|
|
(4.0
|
)%
|
|
Surcharges and other fees
|
1.6
|
|
|
1.5
|
%
|
|
Commodity price and volume
|
(1.2
|
)
|
|
(1.1
|
)%
|
|
Acquisitions
|
11.9
|
|
|
10.8
|
%
|
|
Closed operations
|
(2.2
|
)
|
|
(2.0
|
)%
|
|
Solid waste revenues
|
$
|
11.2
|
|
|
10.2
|
%
|
•
|
$
4.0 million
from
favorable
collection pricing; and
|
•
|
$
1.5 million
from
favorable
disposal pricing associated primarily with our landfills and transfer stations.
|
•
|
$
(4.1) million
from
lower
disposal volumes (of which $(3.9) million relates to lower transportation volumes primarily associated with a large contaminated soils project that occurred in the prior year and $(0.2) million relates to lower landfill volumes); and
|
•
|
$
(0.3) million
from
lower
collection volumes.
|
•
|
$1.6 million
associated primarily with the Energy component of the Energy and Environmental fee and the portion of the Sustainability Recycling Adjustment fee, respectively, that has anniversaried. The Energy component of the fee floats on a monthly basis based on diesel fuel prices, which increased slightly from the prior year. The Sustainability Recycling Adjustment fee floats on a monthly basis based on recycled commodity prices.
|
•
|
$(0.4) million from unfavorable energy pricing and, to a lesser extent, unfavorable commodity pricing; and
|
•
|
$(0.8) million from lower commodity volumes due to lower commodity processing volumes and landfill gas-to-energy volumes.
|
•
|
$
2.0 million
from
higher
tipping fees; and
|
•
|
$
0.5 million
from
higher
commodity volumes; partially offset by
|
•
|
$
(1.9) million
from
unfavorable
commodity pricing in the marketplace.
|
|
Three Months Ended March 31,
|
|
$
Change
|
||||||||||||||
|
2019
|
|
2018
|
|
|||||||||||||
Cost of operations
|
$
|
117.8
|
|
|
72.0
|
%
|
|
$
|
105.6
|
|
|
71.6
|
%
|
|
$
|
12.2
|
|
General and administration
|
$
|
22.7
|
|
|
13.9
|
%
|
|
$
|
21.0
|
|
|
14.3
|
%
|
|
$
|
1.7
|
|
Depreciation and amortization
|
$
|
17.5
|
|
|
10.7
|
%
|
|
$
|
16.0
|
|
|
10.8
|
%
|
|
$
|
1.5
|
|
•
|
higher disposal costs associated with: additional volumes associated with acquisition activity; increased disposal pricing in the northeastern United States; and an increased reliance on third-party disposal sites in our Organics line-of-business; and
|
•
|
higher hauling and third-party transportation costs associated with: higher collection volumes related to acquisition activity in the Western region and, to a lesser extent, the Eastern region; higher transportation rates; higher brokerage
|
|
Three Months Ended March 31,
|
|
$
Change
|
||||||||||||||
|
2019
|
|
2018
|
|
|||||||||||||
Depreciation
|
$
|
10.3
|
|
|
6.3
|
%
|
|
$
|
8.3
|
|
|
5.7
|
%
|
|
$
|
2.0
|
|
Landfill amortization
|
5.8
|
|
|
3.6
|
%
|
|
7.1
|
|
|
4.8
|
%
|
|
(1.3
|
)
|
|||
Other amortization
|
1.4
|
|
|
0.9
|
%
|
|
0.6
|
|
|
0.4
|
%
|
|
0.8
|
|
|||
|
$
|
17.5
|
|
|
10.8
|
%
|
|
$
|
16.0
|
|
|
10.9
|
%
|
|
$
|
1.5
|
|
|
Three Months Ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
Charlton settlement charge (1)
|
$
|
—
|
|
|
$
|
1.2
|
|
Legal and other costs (2)
|
0.6
|
|
|
0.4
|
|
||
Southbridge Landfill closure charge, net
|
$
|
0.6
|
|
|
$
|
1.6
|
|
(1)
|
We established a reserve associated with settlement of the Town of Charlton's claim against us. See Note 8,
Commitments and Contingencies
to our consolidated financial statements included under Part I, Item 1 of this Quarterly Report on Form 10-Q for additional disclosure.
|
(2)
|
We incurred legal costs as well as other costs associated with various matters as part of the Southbridge Landfill closure. See Note 8,
Commitments and Contingencies
to our consolidated financial statements included under Part I, Item 1 of this Quarterly Report on Form 10-Q for additional disclosure.
|
|
Three Months Ended
March 31, |
|
$
Change
|
||||||||
|
2019
|
|
2018
|
|
|||||||
Eastern
|
$
|
47.0
|
|
|
$
|
44.5
|
|
|
$
|
2.5
|
|
Western
|
73.6
|
|
|
64.7
|
|
|
8.9
|
|
|||
Recycling
|
10.8
|
|
|
10.2
|
|
|
0.6
|
|
|||
Other
|
32.3
|
|
|
28.1
|
|
|
4.2
|
|
|||
Total revenues
|
$
|
163.7
|
|
|
$
|
147.5
|
|
|
$
|
16.2
|
|
|
Period-to-Period Change for the Three Months Ended March 31, 2019 vs. 2018
|
|
|||||
|
Amount
|
|
% of Growth
|
|
|||
Price
|
$
|
2.7
|
|
|
6.0
|
%
|
|
Volume
|
—
|
|
|
—
|
%
|
|
|
Surcharges and other fees
|
0.7
|
|
|
1.6
|
%
|
|
|
Commodity price and volume
|
(0.2
|
)
|
|
(0.3
|
)%
|
|
|
Acquisitions
|
1.3
|
|
|
2.9
|
%
|
|
|
Closed landfill
|
(2.0
|
)
|
|
(4.6
|
)%
|
|
|
Solid waste revenues
|
$
|
2.5
|
|
|
5.6
|
%
|
|
•
|
$2.1 million
from
favorable
collection pricing; and
|
•
|
$0.6 million
from
favorable
disposal pricing related to transfer stations and landfills.
|
•
|
$0.3 million
from
higher
disposal volumes related to transfer stations, partially mitigated by lower volumes related to landfills; offset by
|
•
|
$(0.3) million
from
lower
collection volumes.
|
|
Period-to-Period Change for the Three Months Ended March 31, 2019 vs. 2018
|
|||||
|
Amount
|
|
% of Growth
|
|||
Price
|
$
|
2.8
|
|
|
4.3
|
%
|
Volume
|
(4.2
|
)
|
|
(6.6
|
)%
|
|
Surcharges and other fees
|
0.9
|
|
|
1.4
|
%
|
|
Commodity price and volume
|
(1.1
|
)
|
|
(1.6
|
)%
|
|
Acquisitions
|
10.6
|
|
|
16.4
|
%
|
|
Closed operations
|
(0.1
|
)
|
|
(0.2
|
)%
|
|
Solid waste revenues
|
$
|
8.9
|
|
|
13.7
|
%
|
•
|
$1.9 million
from
favorable
collection pricing; and
|
•
|
$0.9 million
from
favorable
disposal pricing related to landfills and transfer stations.
|
•
|
$(4.2) million
from
lower
disposal volumes of which $(3.5) million relates to lower transportation volumes associated with a large contaminated soils project that occurred in the prior year.
|
|
Three Months Ended
March 31, |
|
$
Change
|
||||||||
|
2019
|
|
2018
|
|
|||||||
Eastern
|
$
|
(0.6
|
)
|
|
$
|
(1.8
|
)
|
|
$
|
1.2
|
|
Western
|
5.4
|
|
|
7.2
|
|
|
(1.8
|
)
|
|||
Recycling
|
(0.9
|
)
|
|
(5.2
|
)
|
|
4.3
|
|
|||
Other
|
0.5
|
|
|
0.6
|
|
|
(0.1
|
)
|
|||
Operating income
|
$
|
4.4
|
|
|
$
|
0.8
|
|
|
$
|
3.6
|
|
•
|
higher hauling and third-party transportation costs associated with higher collection volumes related to acquisition activity and higher transportation rates;
|
•
|
higher disposal costs associated with acquisition activity and increased disposal pricing in the northeastern United States;
|
•
|
higher labor costs associated with acquisition activity;
|
•
|
higher fuel costs associated with higher volumes on acquisition activity and a slight increase in diesel fuel prices; and
|
•
|
higher maintenance and repair costs associated with higher fleet and facility maintenance costs due to acquisition activity and related business growth; partially offset by
|
•
|
lower direct operational costs associated with lower landfill operating costs and landfill operating lease amortization due to the closure of the Southbridge Landfill; and
|
•
|
lower liability and auto insurance costs based on the change in claims activity.
|
•
|
higher disposal costs associated with additional volumes related to acquisition activity and increased disposal pricing in the northeastern United States;
|
•
|
higher hauling and third-party transportation costs associated with higher collection volumes related to acquisition activity and higher transportation rates, partially offset by lower hauling and third-party transportation costs from lower transportation volumes associated with a large contaminated soils project that occurred in prior year;
|
•
|
higher labor costs related to acquisition activity;
|
•
|
higher fuel costs due to higher volumes associated with acquisition activity and a slight increase in diesel fuel prices; and
|
•
|
higher fleet and facility maintenance costs due to acquisition activity and related business growth; partially offset by
|
•
|
lower auto insurance costs based on the change in claims activity; and
|
•
|
lower landfill operating lease amortization on lower landfill volumes.
|
•
|
the impact of intercompany profits in our Organics line-of-business now passing through to landfill disposal sites, combined with declining margins as higher revenues, which were driven by two large transportation and disposal contracts, also resulted in higher third-party transportation and disposal costs as much of these new volumes were directed to third-party sites; partially offset by
|
•
|
improved operating performance of our Customer Solutions line-of-business, as revenue growth associated with increased volumes outpaced higher cost of operations associated with the corresponding increase in purchased material, hauling and transportation costs.
|
|
March 31,
2019 |
|
December 31,
2018 |
||||
Cash and cash equivalents
|
$
|
19.9
|
|
|
$
|
4.0
|
|
Restricted assets:
|
|
|
|
||||
Restricted investment securities - landfill closure
|
$
|
1.3
|
|
|
$
|
1.2
|
|
Long-term debt:
|
|
|
|
||||
Current portion
|
$
|
2.7
|
|
|
$
|
2.3
|
|
Long-term portion
|
485.1
|
|
|
552.9
|
|
||
Total long-term debt
|
$
|
487.8
|
|
|
$
|
555.2
|
|
|
Three Months Ended March 31,
|
|
$
Change
|
||||||||
|
2019
|
|
2018
|
|
|||||||
Net cash provided by operating activities
|
$
|
4.8
|
|
|
$
|
12.8
|
|
|
$
|
(8.0
|
)
|
Net cash used in investing activities
|
$
|
(19.4
|
)
|
|
$
|
(28.0
|
)
|
|
$
|
8.6
|
|
Net cash provided by financing activities
|
$
|
30.6
|
|
|
$
|
15.6
|
|
|
$
|
15.0
|
|
|
Three Months Ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
Net loss
|
$
|
(1.7
|
)
|
|
$
|
(3.9
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
17.5
|
|
|
16.0
|
|
||
Depletion of landfill operating lease obligations
|
1.7
|
|
|
2.4
|
|
||
Interest accretion on landfill and environmental remediation liabilities
|
1.8
|
|
|
1.4
|
|
||
Amortization of debt issuance costs and discount on long-term debt
|
0.6
|
|
|
0.7
|
|
||
Stock-based compensation
|
1.4
|
|
|
2.1
|
|
||
Gain on sale of property and equipment
|
(0.1
|
)
|
|
(0.3
|
)
|
||
Southbridge Landfill non-cash closure charge
|
—
|
|
|
1.4
|
|
||
Development project charge
|
—
|
|
|
0.3
|
|
||
Right-of-use asset - operating lease expense
|
2.6
|
|
|
—
|
|
||
Deferred income taxes
|
0.2
|
|
|
(1.2
|
)
|
||
|
24.0
|
|
|
18.9
|
|
||
Changes in assets and liabilities, net
|
(19.2
|
)
|
|
(6.1
|
)
|
||
Net cash provided by operating activities
|
$
|
4.8
|
|
|
$
|
12.8
|
|
•
|
increased revenues of
$16.2 million
associated with higher collection and transfer station revenues on higher pricing and acquisition activity and higher revenues on volumes in our Customer Solutions, Organics and Recycling lines-of-business; partially mitigated by lower disposal revenues on lower volumes and lower recycling commodity pricing; partially offset by
|
•
|
higher cost of operations of
$12.2 million
driven by business growth resulting in higher third-party direct costs, higher labor costs, higher direct operational costs, higher fuel costs and higher fleet maintenance and facility costs; and
|
•
|
higher general and administration expense of
$1.7 million
attributed to higher labor and related benefit costs associated with acquisition activity.
|
•
|
an increase in cash outflows associated with accounts payable;
|
•
|
an increase in cash outflows associated with accrued expenses and other liabilities including payroll and related expenses; and
|
•
|
an increase in cash outflows associated with prepaid expenses, inventories and other assets; partially offset by
|
•
|
an increase in cash inflows associated with accounts receivable.
|
|
Three Months Ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
Acquisitions, net of cash acquired
|
$
|
(1.2
|
)
|
|
$
|
(19.0
|
)
|
Additions to property, plant and equipment
|
(18.2
|
)
|
|
(8.9
|
)
|
||
Payments on landfill operating lease contracts
|
—
|
|
|
(0.5
|
)
|
||
Proceeds from sale of property and equipment
|
—
|
|
|
0.4
|
|
||
Net cash used in investing activities
|
$
|
(19.4
|
)
|
|
$
|
(28.0
|
)
|
|
Three Months Ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
Proceeds from long-term borrowings
|
$
|
10.6
|
|
|
$
|
66.7
|
|
Principal payments on long-term debt
|
(80.7
|
)
|
|
(51.4
|
)
|
||
Proceeds from the exercise of share based awards
|
0.3
|
|
|
0.3
|
|
||
Proceeds from the issuance of Class A Common Stock
|
100.4
|
|
|
—
|
|
||
Net cash provided by financing activities
|
$
|
30.6
|
|
|
$
|
15.6
|
|
|
Twelve Months Ended March 31, 2019
|
|
Covenant Requirement at March 31, 2019
|
||
Maximum consolidated net leverage ratio (1)
|
3.10
|
|
|
4.50
|
|
Minimum interest coverage ratio
|
6.26
|
|
|
3.00
|
|
(1)
|
The maximum consolidated net leverage ratio is calculated as consolidated funded debt, net of unencumbered cash and cash equivalents in excess of $2.0 million (calculated at
$469.9 million
as of
March 31, 2019
, or
$487.8 million
of consolidated funded debt less
$17.9 million
of cash and cash equivalents in excess of $2.0 million as of
March 31, 2019
), divided by consolidated EBITDA. Consolidated EBITDA is based on operating results for the twelve months preceding the measurement date of
March 31, 2019
. Consolidated funded debt, net of unencumbered cash and cash equivalents in excess of $2.0 million, and consolidated EBITDA as defined by the Credit Agreement ("Consolidated EBITDA") are non-GAAP financial measures that should not be considered an alternative to any measure of financial performance calculated and presented in accordance with generally accepted accounting principles in the United States. A reconciliation of net cash provided by operating activities to minimum consolidated EBITDA is as follows (in millions):
|
|
Twelve Months Ended March 31, 2019
|
||
Net cash provided by operating activities
|
$
|
112.8
|
|
Changes in assets and liabilities, net of effects of acquisitions and divestitures
|
18.5
|
|
|
Gain on sale of property and equipment
|
0.3
|
|
|
Non-cash expense from acquisition activities and other items
|
(0.8
|
)
|
|
Loss on debt extinguishment
|
(7.4
|
)
|
|
Southbridge Landfill non-cash closure charge
|
(14.8
|
)
|
|
Impairment of investment
|
(1.1
|
)
|
|
Southbridge Landfill insurance recovery for investing activities
|
3.5
|
|
|
Stock based compensation
|
(10.4
|
)
|
|
Interest expense, less amortization of debt issuance costs
|
24.0
|
|
|
Provision for income taxes, net of deferred income taxes
|
(1.4
|
)
|
|
Adjustments as allowed by the Credit Agreement
|
28.4
|
|
|
Consolidated EBITDA
|
$
|
151.6
|
|
•
|
the volume of waste relating to C&D activities decreases substantially during the winter months in the northeastern United States; and
|
•
|
decreased tourism in Vermont, New Hampshire, Maine and eastern New York during the winter months tends to lower the volume of waste generated by commercial and restaurant customers, which is partially offset by increased volume from the ski industry.
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
ITEM 1.
|
LEGAL PROCEEDINGS
|
|
|
|
|
||||
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Beginning balance
|
$
|
5.2
|
|
|
$
|
5.9
|
|
Obligations settled (1)
|
(0.1
|
)
|
|
(0.2
|
)
|
||
Ending balance
|
$
|
5.1
|
|
|
$
|
5.7
|
|
(1)
|
Includes amounts that are being processed through accounts payable as a part of our disbursements cycle.
|
|
|
|
|
||||
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Beginning balance
|
$
|
5.6
|
|
|
$
|
5.8
|
|
Obligations settled
|
—
|
|
|
—
|
|
||
Ending balance
|
$
|
5.6
|
|
|
$
|
5.8
|
|
ITEM 1A.
|
RISK FACTORS
|
ITEM 6.
|
EXHIBITS
|
Exhibit
No.
|
|
Description
|
|
|
|
31.1 +
|
|
|
|
|
|
31.2 +
|
|
|
|
|
|
32.1 ++
|
|
|
|
|
|
32.2 ++
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document.**
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document.**
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Calculation Linkbase Document.**
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Label Linkbase Document.**
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Presentation Linkbase Document.**
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document.**
|
**
|
|
Submitted Electronically Herewith. Attached as Exhibit 101 to this report are the following formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Balance Sheets as of March 31, 2019 and December 31, 2018, (ii) Consolidated Statements of Operations for the three months ended March 31, 2019 and 2018, (iii) Consolidated Statements of Comprehensive Loss for the three months ended March 31, 2019 and 2018, (iv) Consolidated Statement of Stockholders’ Deficit for the three months ended March 31, 2019 and 2018, (v) Consolidated Statements of Cash Flows for the three months ended March 31, 2019 and 2018, and (vi) Notes to Consolidated Financial Statements.
|
+
|
|
Filed Herewith
|
++
|
|
Furnished Herewith
|
|
Casella Waste Systems, Inc.
|
|
|
|
|
Date: May 1, 2019
|
By: /s/ Christopher B. Heald
|
|
|
Christopher B. Heald
|
|
|
Vice President and Chief Accounting Officer
|
|
|
(Principal Accounting Officer)
|
|
|
|
|
Date: May 1, 2019
|
By: /s/ Edmond R. Coletta
|
|
|
Edmond R. Coletta
|
|
|
Senior Vice President and Chief Financial Officer
|
|
|
(Principal Financial Officer)
|
|
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