UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

 

 

 

ý

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

 

 

 

For the quarterly period ended October 31, 2005

 

 

 

OR

 

 

 

o

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

 

 

 

For the transition period from to

 

 

 

Commission file number 000-23211

 

CASELLA WASTE SYSTEMS, INC.

(Exact name of registrant as specified in its charter)

 

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)

 

Registrant’s telephone number, including area code: (802) 775-0325

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o

 

Indicate by check mark whether the registrant is an accelerated filer (as defined in rule 12b-2 of the Exchange Act) Yes  ý  No  o

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of November 30, 2005:

 

Class A Common Stock

 

24,014,107

 

Class B Common Stock

 

988,200

 

 

 



 

PART I.         FINANCIAL INFORMATION

 

ITEM 1.          FINANCIAL STATEMENTS

 

CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(in thousands)

 

 

 

April 30,

 

October 31,

 

 

 

2005

 

2005

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

Cash and cash equivalents

 

$

8,578

 

$

7,579

 

Restricted cash

 

70

 

71

 

Accounts receivable - trade, net of allowance for doubtful accounts of $707 and $764

 

51,726

 

57,832

 

Notes receivable - officers/employees

 

88

 

90

 

Refundable income taxes

 

874

 

 

Prepaid expenses

 

4,371

 

5,392

 

Inventory

 

2,538

 

2,912

 

Deferred income taxes

 

 

1,220

 

Other current assets

 

1,138

 

1,650

 

Total current assets

 

69,383

 

76,746

 

 

 

 

 

 

 

Property, plant and equipment, net of accumulated depreciation and amortization of $324,903 and $357,765

 

412,753

 

453,628

 

Goodwill

 

157,492

 

169,610

 

Intangible assets, net

 

2,711

 

3,308

 

Restricted cash

 

12,124

 

12,253

 

Notes receivable - officers/employees

 

916

 

916

 

Deferred income taxes

 

3,155

 

 

Investments in unconsolidated entities

 

37,699

 

37,691

 

Net assets under contractual obligation

 

1,392

 

1,369

 

Other non-current assets

 

14,829

 

14,285

 

 

 

643,071

 

693,060

 

 

 

 

 

 

 

 

 

$

712,454

 

$

769,806

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

2



 

CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (Continued)

(Unaudited)

(in thousands, except for share and per share data)

 

 

 

April 30,

 

October 31,

 

 

 

2005

 

2005

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

Current maturities of long-term debt

 

$

281

 

$

769

 

Current maturities of capital lease obligations

 

632

 

1,025

 

Accounts payable

 

46,107

 

43,700

 

Accrued payroll and related expenses

 

9,688

 

6,630

 

Accrued interest

 

4,818

 

7,166

 

Deferred income taxes

 

1,419

 

 

Current accrued capping, closure and post-closure costs

 

5,290

 

2,621

 

Other accrued liabilities

 

24,519

 

25,850

 

Total current liabilities

 

92,754

 

87,761

 

 

 

 

 

 

 

Long-term debt, less current maturities

 

378,436

 

425,479

 

Capital lease obligations, less current maturities

 

1,475

 

2,274

 

Accrued capping, closure and post-closure costs, less current portion

 

21,338

 

24,623

 

Deferred income taxes

 

 

3,374

 

Other long-term liabilities

 

11,705

 

11,428

 

 

 

 

 

 

 

COMMITMENTS AND CONTINGENCIES

 

 

 

 

 

 

 

 

 

 

 

Series A redeemable, convertible preferred stock -
Authorized - 55,750 shares, issued and outstanding - 53,750 and 53,000 shares as of April 30, 2005 and October 31, 2005, respectively, liquidation preference of $1,000 per share plus accrued but unpaid dividends

 

67,964

 

68,702

 

 

 

 

 

 

 

STOCKHOLDERS’ EQUITY:

 

 

 

 

 

Class A common stock -
Authorized - 100,000,000 shares, $0.01 par value; issued and outstanding - 23,860,000 and 24,014,000 shares as of April 30, 2005 and October 31, 2005, respectively

 

239

 

240

 

Class B common stock -
Authorized - 1,000,000 shares, $0.01 par value, 10 votes per share, issued and outstanding - 988,000 shares

 

10

 

10

 

Accumulated other comprehensive income

 

767

 

774

 

Additional paid-in capital

 

274,088

 

274,198

 

Accumulated deficit

 

(136,322

)

(129,057

)

Total stockholders’ equity

 

138,782

 

146,165

 

 

 

 

 

 

 

 

 

$

712,454

 

$

769,806

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

3



 

CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(in thousands)

 

 

 

Three Months Ended
October 31,

 

Six Months Ended
October 31,

 

 

 

2004

 

2005

 

2004

 

2005

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

126,381

 

$

136,795

 

$

250,053

 

$

268,795

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Cost of operations

 

79,385

 

88,043

 

157,663

 

173,630

 

General and administration

 

16,370

 

18,132

 

31,885

 

35,350

 

Depreciation and amortization

 

17,575

 

16,914

 

34,798

 

33,047

 

Deferred costs

 

295

 

 

295

 

 

 

 

113,625

 

123,089

 

224,641

 

242,027

 

Operating income

 

12,756

 

13,706

 

25,412

 

26,768

 

 

 

 

 

 

 

 

 

 

 

Other expense/(income), net:

 

 

 

 

 

 

 

 

 

Interest income

 

(112

)

(184

)

(170

)

(350

)

Interest expense

 

7,352

 

8,005

 

14,497

 

15,522

 

Income from equity method investment

 

(994

)

(1,513

)

(927

)

(1,443

)

Other (income)/expense

 

220

 

(133

)

751

 

(83

)

 

 

 

 

 

 

 

 

 

 

Other expense, net

 

6,466

 

6,175

 

14,151

 

13,646

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations before income taxes and discontinued operations

 

6,290

 

7,531

 

11,261

 

13,122

 

Provision for income taxes

 

2,805

 

3,374

 

5,014

 

5,857

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations before discontinued operations

 

3,485

 

4,157

 

6,247

 

7,265

 

 

 

 

 

 

 

 

 

 

 

Discontinued Operations:

 

 

 

 

 

 

 

 

 

Income from discontinued operations (net of income taxes of $40 and $96)

 

59

 

 

140

 

 

Loss on disposal of discontinued operations (net of income taxes of $645)

 

(150

)

 

(150

)

 

 

 

 

 

 

 

 

 

 

 

Net income

 

3,394

 

4,157

 

6,237

 

7,265

 

Preferred stock dividend

 

832

 

854

 

1,670

 

1,704

 

Net income available to common stockholders

 

$

2,562

 

$

3,303

 

$

4,567

 

$

5,561

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

4



 

CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (Continued)

(Unaudited)

(in thousands, except for per share data)

 

 

 

Three Months Ended
October 31,

 

Six Months Ended
October 31,

 

 

 

2004

 

2005

 

2004

 

2005

 

Earnings Per Share:

 

 

 

 

 

 

 

 

 

Basic:

 

 

 

 

 

 

 

 

 

Income from continuing operations before discontinued operations available to common stockholders

 

$

0.11

 

$

0.13

 

$

0.19

 

$

0.22

 

Income from discontinued operations, net

 

 

 

0.01

 

 

Loss on disposal of discontinued operations, net

 

(0.01

)

 

(0.01

)

 

 

 

 

 

 

 

 

 

 

 

Net income per common share available to common stockholders

 

$

0.10

 

$

0.13

 

$

0.19

 

$

0.22

 

 

 

 

 

 

 

 

 

 

 

Basic weighted average common shares outstanding

 

24,614

 

24,925

 

24,553

 

24,889

 

 

 

 

 

 

 

 

 

 

 

Diluted:

 

 

 

 

 

 

 

 

 

Income from continuing operations before discontinued operations available to common stockholders

 

$

0.11

 

$

0.13

 

$

0.18

 

$

0.22

 

Income from discontinued operations, net

 

 

 

0.01

 

 

Loss on disposal of discontinued operations, net

 

(0.01

)

 

(0.01

)

 

 

 

 

 

 

 

 

 

 

 

Net income per common share available to common stockholders

 

$

0.10

 

$

0.13

 

$

0.18

 

$

0.22

 

 

 

 

 

 

 

 

 

 

 

Diluted weighted average common shares outstanding

 

25,003

 

25,358

 

25,040

 

25,277

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

5



 

CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(in thousands)

 

 

 

Six Months Ended
October 31,

 

 

 

2004

 

2005

 

Cash Flows from Operating Activities:

 

 

 

 

 

Net income

 

$

6,237

 

$

7,265

 

Adjustments to reconcile net income to net cash provided by operating activities -

 

 

 

 

 

Depreciation and amortization

 

34,798

 

33,047

 

Depletion of landfill operating lease obligations

 

2,588

 

2,974

 

Loss on disposal of discontinued operations, net

 

150

 

 

Income from equity method investment

 

(927

)

(1,443

)

Deferred costs

 

295

 

 

Loss on sale of equipment

 

113

 

41

 

Deferred income taxes

 

3,701

 

3,993

 

Changes in assets and liabilities, net of effects of acquisitions and divestitures -

 

(5,112

)

(5,735

)

Accounts receivable

 

 

 

 

 

Accounts payable

 

93

 

(2,820

)

Other assets and liabilities

 

(6,090

)

(718

)

 

 

29,609

 

29,339

 

Net Cash Provided by Operating Activities

 

35,846

 

36,604

 

 

 

 

 

 

 

Cash Flows from Investing Activities:

 

 

 

 

 

Acquisitions, net of cash acquired

 

(5,040

)

(15,507

)

Additions to property, plant and equipment - growth

 

(10,289

)

(25,878

)

- maintenance

 

(32,144

)

(39,021

)

Payments on landfill operating lease contracts

 

(17,326

)

(5,869

)

Proceeds from divestitures

 

3,050

 

 

Proceeds from sale of equipment

 

887

 

762

 

Proceeds from assets under contractual obligation

 

659

 

429

 

 

 

 

 

 

 

Net Cash Used In Investing Activities

 

(60,203

)

(85,084

)

 

 

 

 

 

 

Cash Flows from Financing Activities:

 

 

 

 

 

Proceeds from long-term borrowings

 

83,950

 

111,672

 

Principal payments on long-term debt

 

(63,052

)

(64,807

)

Proceeds from exercise of stock options

 

224

 

616

 

Net Cash Provided by Financing Activities

 

21,122

 

47,481

 

Net decrease in cash and cash equivalents

 

(3,235

)

(999

)

Cash and cash equivalents, beginning of period

 

8,007

 

8,578

 

 

 

 

 

 

 

Cash and cash equivalents, end of period

 

$

4,772

 

$

7,579

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

6



 

CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(Unaudited)

(in thousands)

 

 

 

Six Months Ended
October 31,

 

 

 

2004

 

2005

 

 

 

 

 

 

 

Supplemental Disclosures of Cash Flow Information:

 

 

 

 

 

Cash paid during the period for -

 

 

 

 

 

 

 

Interest

 

$

13,940

 

$

12,823

 

Income taxes, net of refunds

 

$

709

 

$

1,059

 

 

 

 

 

 

 

Supplemental Disclosures of Non-Cash Investing and Financing Activities:

 

 

 

 

 

Summary of entities acquired in purchase business combinations -

 

 

 

 

 

 

 

Fair value of net assets acquired

 

$

5,698

 

$

17,482

 

Cash paid, net

 

(5,040

)

(15,507

)

 

 

 

 

 

 

Liabilities assumed and holdbacks to seller

 

$

658

 

$

1,975

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

7



 

CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(In thousands, except for per share data)

 

1.             ORGANIZATION

 

The consolidated balance sheets of Casella Waste Systems, Inc. (the “Parent”) and Subsidiaries (the “Company”) as of April 30, 2005 and October 31, 2005, the consolidated statements of operations for the three and six months ended October 31, 2004 and 2005 and the consolidated statements of cash flows for the six months ended October 31, 2004 and 2005 are unaudited.  In the opinion of management, such financial statements include all adjustments (which include normal recurring and nonrecurring adjustments) necessary for a fair presentation of the financial position, results of operations, and cash flows for the periods presented.  The consolidated financial statements presented herein should be read in conjunction with the Company’s audited consolidated financial statements as of and for the twelve months ended April 30, 2005.  These were included as part of the Company’s Annual Report on Form 10-K for the year ended April 30, 2005 (the “Annual Report”).  The results for the three and six months ended October 31, 2005 may not be indicative of the results that may be expected for the fiscal year ending April 30, 2006.

 

2.             RECLASSIFICATIONS

 

Effective November 1, 2004 the Eastern region was divided into the North Eastern and South Eastern regions because of a change in the Company’s internal reporting structure.  Therefore, segment data for the three and six months ended October 31, 2004 has been revised to reflect changes in the Company’s segment classifications.

 

3.             BUSINESS COMBINATIONS

 

On September 19, 2005 the Company acquired the entire membership interest in Blue Mountain Recycling, LLC which has two single-stream recycling facilities in Philadelphia and Montgomeryville, Pennsylvania and a small recyclable material transfer station in Upper Dublin, Pennsylvania.  Blue Mountain also has a processing agreement with RecycleBank LLC, an incentive-based recycling service that gives homeowners credits for recycling which can be used with participating merchants. The Company acquired Blue Mountain for $15,286 including $13,428 in cash and $1,858 in capital leases and other debt assumed.  The acquisition of Blue Mountain includes contingent consideration based on the attainment of Blue Mountain’s future operating results and the free cash flow generated from the RecycleBank processing agreement.  Future consideration will be allocated to goodwill as contingencies are met.  On a preliminary basis, the Company has allocated the purchase price to the tangible and intangible assets acquired, with the residual amount allocated to goodwill. The Company has not yet finalized the Blue Mountain purchase price allocation as the valuations of certain tangible and intangible assets are not yet complete. The Company does not believe that the final purchase price allocation will materially impact the operating results reflected herein.

 

During the six months ended October 31, 2005, the Company also acquired seven solid waste hauling operations and recorded additional expenditures for a landfill closure project acquired in the fourth quarter of fiscal year 2005.  These transactions were in exchange for total consideration of $2,196 including $2,079 in cash and $117 in other liabilities assumed.  During the six months ended October 31, 2004, the Company acquired six solid waste hauling operations.  These transactions were in exchange for total consideration of $5,540 including $5,040 in cash and $500 in liabilities assumed.  The operating results of these businesses are included in the consolidated statements of operations from the dates of acquisition.  The purchase prices have been allocated to the net assets acquired based on their fair values at the dates of acquisition including the value of non-compete agreements with the residual amounts allocated to goodwill.

 

8



 

The following unaudited pro forma combined information shows the results of the Company’s operations as though each of the acquisitions made in the six months ended October 31, 2004 and 2005 had been completed as of May 1, 2004.

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

October 31,

 

October 31,

 

 

 

2004

 

2005

 

2004

 

2005

 

Revenue

 

$

129,076

 

$

138,168

 

$

255,672

 

$

273,054

 

Income from continuing operations before discontinued operations

 

$

3,613

 

$

4,193

 

$

6,621

 

$

7,408

 

Net income

 

$

3,522

 

$

4,193

 

$

6,611

 

$

7,408

 

Diluted net income per common share

 

$

0.11

 

$

0.13

 

$

0.20

 

$

0.23

 

 

The foregoing pro forma results have been prepared for comparative purposes only and are not necessarily indicative of the actual results of operations had the acquisitions taken place as of May 1, 2004 or the results of future operations of the Company.  Furthermore, such pro forma results do not give effect to all cost savings or incremental costs that may occur as a result of the integration and consolidation of the completed acquisitions.

 

In late September 2005 the Company commenced operations at the Chemung County Landfill, after executing a twenty-five year operation, management and lease agreement with Chemung County, New York.  The landfill is permitted to accept 120 tons per year of municipal solid waste.  The Company has also assumed operations of the solid waste transfer station and recycling facility.  The Company made initial payments of $4,931 related to this transaction.

 

4.             GOODWILL AND INTANGIBLE ASSETS

 

The following table shows the activity and balances related to goodwill from April 30, 2005 through October 31, 2005:

 

 

 

North
Eastern
Region

 

South
Eastern
Region

 

Central
Region

 

Western
Region

 

FCR
Recycling

 

Total

 

Balance, April 30, 2005

 

$

25,340

 

$

31,645

 

$

30,158

 

$

53,450

 

$

16,899

 

$

157,492

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisitions

 

 

 

393

 

857

 

10,947

 

12,197

 

Divestitures

 

 

 

(79

)

 

 

(79

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, October 31, 2005

 

$

25,340

 

$

31,645

 

$

30,472

 

$

54,307

 

$

27,846

 

$

169,610

 

 

Intangible assets at April 30, 2005 and October 31, 2005 consist of the following:

 

9



 

 

 

Covenants
not to
compete

 

Customer
lists

 

Licensing
Agreements

 

Total

 

Balance, April 30, 2005

 

 

 

 

 

 

 

 

 

Intangible assets

 

$

16,299

 

$

688

 

$

 

$

16,987

 

Less accumulated amortization

 

(13,670

)

(606

)

 

(14,276

)

 

 

$

2,629

 

$

82

 

$

 

$

2,711

 

 

 

 

 

 

 

 

 

 

 

Balance, October 31, 2005

 

 

 

 

 

 

 

 

 

Intangible assets

 

$

16,476

 

$

688

 

$

1,000

 

$

18,164

 

Less accumulated amortization

 

(14,205

)

(651

)

 

(14,856

)

 

 

$

2,271

 

$

37

 

$

1,000

 

$

3,308

 

 

Amortization expense for the three months ended October 31, 2004 and 2005 was $385 and $326, respectively.  Amortization expense for the six months ended October 31, 2004 and 2005 was $786 and $649, respectively.  The intangible amortization expense estimated as of October 31, 2005, for the five years following 2005 is as follows:

 

2006

 

2007

 

2008

 

2009

 

2010

 

$

1,307

 

$

839

 

$

560

 

$

328

 

$

216

 

 

5.             NEW ACCOUNTING STANDARDS

 

In December 2004, the FASB issued SFAS 123R, Share-Based Payment.  SFAS 123R replaces SFAS 123 and supersedes APB Opinion No. 25 requiring public companies to recognize compensation expense for the cost of awards of equity instruments. This compensation cost will be measured as the fair value of the award on the grant date estimated using an option-pricing model. SFAS 123R was originally issued with implementation required for interim and annual periods beginning after June 15, 2005.  On April 14, 2005, the Securities and Exchange Commission (“SEC”) amended the effective date to the beginning of the first fiscal year after June 15, 2005.  The Company is evaluating the various transition provisions under SFAS 123R and will adopt SFAS 123R effective May 1, 2006, which is expected to result in increased compensation expense in future periods.

 

6.             LEGAL PROCEEDINGS

 

In the normal course of its business and as a result of the extensive governmental regulation of the waste industry, the Company may periodically become subject to various judicial and administrative proceedings involving Federal, state or local agencies.  In these proceedings, an agency may seek to impose fines on the Company or to revoke, or to deny renewal of, an operating permit held by the Company.  In addition, the Company may become party to various claims and suits for alleged damages to persons and property, alleged violation of certain laws and for alleged liabilities arising out of matters occurring during the normal operation of the waste management business.

 

On March 2, 2005, the Company’s subsidiary Casella Waste Management of Pennsylvania, Inc. (“CWMPA”) was issued an Administrative Order by the Pennsylvania Department of Environmental Protection (“DEP”) revoking CWMPA’s transfer station permit for its 75-ton-per-day transfer station located in Wellsboro, Pennsylvania and ordering that the site be closed.  The DEP based its decision on certain alleged violations related to recordkeeping and site management over a five-year period.  On March 10, 2005, CWMPA appealed the Order to the State’s Environmental Hearing Board (“EHB”).  The Pennsylvania Attorney General’s Office is also conducting a criminal investigation of the allegations.  On March 17, 2005, CWMPA and the DEP mutually agreed to a Supersedeas Order approved by the EHB which superseded the

 

10



 

March 2, 2005 DEP Order, stating that CWMPA agreed to (i) voluntarily cease operations at the transfer station until May 16, 2005; (ii) relocate its hauling company before May 16, 2005; and (iii) develop a Management and Operation Plan for the transfer station by May 16, 2005.  On May 17, 2005, the EHB judge extended the Supersedeas Order until June 10, 2005 and authorized the transfer station to resume operations upon completion of the relocation of the hauling company and receipt of a permit modification related to the weighing of bag waste from individual customers.  CWMPA satisfied the conditions and recommenced operations at the transfer station on May 20, 2005.  On June 9, 2005, CWMPA and the DEP filed a stipulation with the EHB withdrawing and voiding the March 2, 2005 Order revoking the permit, while reserving the DEP’s right to seek civil penalties and the Company’s right to defend against any such penalties.  The Company is currently engaged in settlement negotiations with the DEP and discussions with the Attorney General’s office regarding their investigation.  However, at this stage it is impossible to predict whether a settlement with the DEP and closure of the Attorney General’s investigation will be reached.

 

On March 10, 2005, the Zoning Enforcement Officer (“ZEO”) for the Town of Hardwick, Massachusetts rendered an opinion that a portion of the current Phase II footprint of the Company’s Hardwick Landfill is on land that is not properly zoned.  On April 7, 2005, the Company appealed the opinion to the Hardwick Zoning Board of Appeals (“ZBA”).  On July 13, 2005, the ZBA denied the Company’s appeal.  On August 1, 2005, the Company appealed the ZBA’s decision to the State’s Land Court.  The Company proposed a plan to implement an interim closure of the affected lot which included relocation of waste from an unlined area on a lot unaffected by the decision to the affected lot.  The ZEO issued a letter prohibiting the Company from relocating waste onto the affected lot.  The Company appealed the ZEO decision to the ZBA and the ZBA denied the appeal on November 29, 2005.  The Company intends to appeal the ZBA decision to the Land Court and have it consolidated with the other appeal filed with the Land Court.  On October 25, 2005, the Town voted to approve new general bylaw articles which, among other things, prohibit the use of construction and demolition debris as grading, shaping or closure materials.  Such articles may have an adverse impact on the Company’s ability to relocate some or all of the waste onto the affected lot.  The articles have been forwarded to the Attorney General for approval.  The Company will petition the Attorney General to disapprove the articles because they are inconsistent with the state statutory provisions concerning solid waste disposal facilities.  The Company and the Town executed a Host Community Agreement on June 7, 2005, which provides the Town with certain immediate benefits and will provide certain deferred benefits upon receipt of approvals for the rezoning of the existing landfill area and an expansion area, which the Company expects to apply for in the future.

 

On March 14, 2005, the Company and the Company’s subsidiary New England Waste Services of ME, Inc. (“NEWSME”) were served with a complaint filed by the Environmental Exchange in the State of Maine Superior Court alleging restraint of trade, and conspiracy to monopolize trade.  The plaintiff claims that the Company’s ownership of NEWSME, which in turn owns the New England Organics line of business and the Pine Tree Landfill, allegedly enabled NEWSME to obtain favorable tipping fees at Pine Tree Landfill thereby excluding the plaintiff from competitively bidding on a contract with Indeck Maine Energy LLC to haul and dispose of fly ash.  Plaintiff alleges that the Company and NEWSME lessened competition and monopolized trade.  On April 4, 2005, the Company and NEWSME filed a motion to dismiss.  Subsequently, the plaintiff filed a motion to amend its complaint to allege a count of conspiracy to monopolize and a count of attempting to monopolize.  On October 24, 2005 the Court granted plaintiff’s motion to amend but dismissed the conspiracy to monopolize count, leaving only the attempt to monopolize count.  The Company believes it has meritorious defenses to this claim.

 

On May 25, 2005, the Company was served with an antitrust summons by the Office of the Attorney General of the State of Maine pursuant to its investigation of whether the Company and the City of Lewiston have entered into an agreement to operate a municipal landfill in restraint of trade or commerce and whether such an agreement would constitute an acquisition of assets that may substantially lessen competition or tend to create a monopoly.  The summons sought the production of documents related to the Company’s operations in the State of Maine.  In July, 2005, the Maine Department of Environmental Protection (“MEDEP”) expressed additional concerns with the Operating Services Agreement related to whether or not it violates a

 

11



 

Maine statute prohibiting the development of commercial landfills.  On October 12, 2005, the Office of the Attorney General rendered its decision that the proposed transaction violates the ban on commercial landfills because of the Attorney General’s belief that the overall effect of the contract constitutes a transfer of meaningful control from the City of Lewiston to the Company.  The transaction is on hold pending review of the Attorney General’s decision.

 

On December 2, 2005, the Company was served with a petition filed in the Supreme Court of the State of New York by a group of approximately 100 residents of Chemung County, New York seeking to vacate and set aside the Operating, Management and Lease Agreement between Chemung County and the Company pertaining to the Company’s operation of the Chemung County Landfill; the Host Community Benefit Agreement between the Town of Chemung and the Company; as well as certain resolutions adopted by the County and the Town authorizing such transactions.  The Company believes that it has meritorious defenses to these claims.

 

The Company is a defendant in certain other lawsuits alleging various claims, none of which, either individually or in the aggregate, the Company believes are material to its financial condition, results of operations or cash flows.

 

7.             ENVIRONMENTAL LIABILITIES

 

The Company is subject to liability for any environmental damage, including personal injury and property damage, that its solid waste, recycling and power generation facilities may cause to neighboring property owners, particularly as a result of the contamination of drinking water sources or soil, possibly including damage resulting from conditions existing before the Company acquired the facilities. The Company may also be subject to liability for similar claims arising from off-site environmental contamination caused by pollutants or hazardous substances if the Company or its predecessors arrange to transport, treat or dispose of those materials. Any substantial liability incurred by the Company arising from environmental damage could have a material adverse effect on the Company’s business, financial condition and results of operations. The Company is not presently aware of any situations that it expects would have a material adverse impact on the results of operations or financial condition.

 

8.             EARNINGS PER SHARE

 

The following table sets forth the numerator and denominator used in the computation of earnings per share:

 

 

 

Three Months Ended
October 31,

 

Six Months Ended
October 31,

 

 

 

2004

 

2005

 

2004

 

2005

 

Numerator:

 

 

 

 

 

 

 

 

 

Income from continuing operations before discontinued operations

 

$

3,485

 

$

4,157

 

$

6,247

 

$

7,265

 

Less: preferred stock dividends

 

(832

)

(854

)

(1,670

)

(1,704

)

Income from continuing operations before discontinued operations available to common stockholders

 

$

2,653

 

$

3,303

 

$

4,577

 

$

5,561

 

 

 

 

 

 

 

 

 

 

 

Denominator:

 

 

 

 

 

 

 

 

 

Number of shares outstanding, end of period:

 

 

 

 

 

 

 

 

 

Class A common stock

 

23,707

 

24,014

 

23,707

 

24,014

 

Class B common stock

 

988

 

988

 

988

 

988

 

Effect of weighted average shares outstanding during period

 

(81

)

(77

)

(142

)

(113

)

Weighted average number of common shares used in basic EPS

 

24,614

 

24,925

 

24,553

 

24,889

 

Impact of potentially dilutive securities:

 

 

 

 

 

 

 

 

 

Dilutive effect of options and contingent stock

 

389

 

433

 

487

 

388

 

Weighted average number of common shares used in diluted EPS

 

25,003

 

25,358

 

25,040

 

25,277

 

 

For the three and six months ended October 31, 2004, 6,951 and 6,456 common stock equivalents related to options and redeemable convertible preferred stock, respectively, were excluded from the calculation of dilutive shares since the inclusion of such shares would be anti-dilutive.

 

For the three and six months ended October 31, 2005, 6,438 and 6,814 common stock equivalents related to options and redeemable convertible preferred stock, respectively, were excluded from the calculation of

 

12



 

dilutive shares since the inclusion of such shares would be anti-dilutive.

 

9.             COMPREHENSIVE INCOME

 

Comprehensive income is defined as the change in net assets of a business enterprise during a period from transactions generated from non-owner sources. It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners. Accumulated other comprehensive income included in the accompanying balance sheets consists of changes in the fair value of the Company’s interest rate swap and commodity hedge agreements as well as the cumulative effect of the change in accounting principle due to the adoption of SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, as amended.  Also included in accumulated other comprehensive income is the change in fair value of certain securities classified as available for sale as well as the Company’s portion of the change in the fair value of commodity hedge agreements of the Company’s equity method investment, US GreenFiber.

 

Comprehensive income for the three and six months ended October 31, 2004 and 2005 is as follows:

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

October 31,

 

October 31,

 

 

 

2004

 

2005

 

2004

 

2005

 

Net income

 

$

3,394

 

$

4,157

 

$

6,237

 

$

7,265

 

Other comprehensive income (loss)

 

(76

)

34

 

33

 

7

 

Comprehensive income

 

$

3,318

 

$

4,191

 

$

6,270

 

$

7,272

 

 

The components of other comprehensive income for the three and six months ended October 31, 2004 and 2005 are shown as follows:

 

 

 

Three Months Ended October 31,

 

 

 

2004

 

2005

 

 

 

Gross

 

Tax
effect

 

Net of
Tax

 

Gross

 

Tax
effect

 

Net of
Tax

 

Changes in fair value of marketable securities during the period

 

$

 

$

 

$

 

$

(37

)

$

(13

)

$

(24

)

Change in fair value of interest rate swaps and commodity hedges during period

 

(130

)

(54

)

(76

)

325

 

132

 

193

 

Reclassification to earnings for interest rate swap contracts

 

 

 

 

(135

)

 

(135

)

 

 

$

(130

)

$

(54

)

$

(76

)

$

153

 

$

119

 

$

34

 

 

 

 

Six Months Ended October 31,

 

 

 

2004

 

2005

 

 

 

Gross

 

Tax
effect

 

Net of
Tax

 

Gross

 

Tax
effect

 

Net of
Tax

 

Changes in fair value of marketable securities during the period

 

$

 

$

 

$

 

$

(86

)

$

(30

)

$

(56

)

Change in fair value of interest rate swaps and commodity hedges during period

 

57

 

24

 

33

 

552

 

217

 

335

 

Reclassification to earnings for interest rate swap contracts

 

 

 

 

(272

)

 

(272

)

 

 

$

57

 

$

24

 

$

33

 

$

194

 

$

187

 

$

7

 

 

13



 

10.          DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

 

The Company’s strategy to hedge against fluctuations in the commodity prices of recycled paper is to enter into hedges to mitigate the variability in cash flows generated from the sales of recycled paper at floating prices, resulting in a fixed price being received from these sales.  The Company is party to twenty-one commodity hedge contracts as of October 31, 2005.  These contracts expire between May 2006 and April 2008.  The Company has evaluated these hedges and believes that these instruments qualify for hedge accounting pursuant to SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, as amended.  As of October 31, 2005 the fair value of these hedges was $13, with the net amount (net of taxes of $5) recorded as an unrealized gain in accumulated other comprehensive income.

 

On May 9, 2005, the Company entered into three separate interest rate swap agreements with three banks for a notional amount of $75,000.  The contracts are forward starting contracts that will effectively fix the interest index rate on the entire notional amount at 4.4% from May 4, 2006 through May 5, 2008.  These agreements will be specifically designated to interest payments under the revolving credit facility and will be accounted for as effective cash flow hedges pursuant to SFAS No. 133.  As of October 31, 2005, the fair value of these swaps was $491, with the net amount (net of taxes of $199) recorded as an unrealized gain in accumulated other comprehensive income.

 

11.          STOCK BASED COMPENSATION PLANS

 

The Company has elected to account for its stock-based compensation plans under APB Opinion No. 25, Accounting for Stock Issued to Employees, for which no compensation expense is recorded in the consolidated statements of operations for the estimated fair value of stock options issued with an exercise price equal to the fair value of the underlying common stock on the grant date.

 

During fiscal 1996, the FASB issued SFAS No. 123, Accounting for Stock-Based Compensation, which defines a fair value based method of accounting for stock-based employee compensation and encourages all entities to adopt that method of accounting for all of their employee stock compensation plans. However, it also allows an entity to continue to measure compensation costs for those plans using the intrinsic method of accounting prescribed by APB Opinion No. 25. Entities electing to remain with the accounting in APB Opinion No. 25 must make pro forma disclosures of net income and earnings per share as if the fair value based method of accounting defined in SFAS No. 123 had been applied. In addition, the Company has adopted the disclosure requirements of SFAS No. 148, Accounting for Stock-Based Compensation - Transition and Disclosure.

 

In accordance with SFAS No. 123 and SFAS No. 148, the Company has computed, for pro forma disclosure purposes, the value as of the grant date of all options granted using the Black-Scholes option pricing model as prescribed by SFAS No. 123, using the following weighted average assumptions for grants in the six months ended October 31, 2004 and 2005.

 

 

 

Six Months Ended
October 31, 2004

 

Six Months Ended
October 31, 2005

 

 

 

 

 

 

 

Risk free interest rate

 

3.39% - 3.97%

 

3.63% - 4.23%

 

Expected dividend yield

 

N/A

 

N/A

 

Expected life

 

5 Years

 

5 Years

 

Expected volatility

 

45.88%

 

40.35%

 

 

The total value of options granted would be amortized on a pro forma basis over the vesting period of the options. Options generally vest over a one to three year period. If the Company had accounted for these plans

 

14



 

in accordance with SFAS No. 123, the Company’s net income and net income per share would have changed as reflected in the following pro forma amounts:

 

 

 

Three Months Ended
October 31,

 

Six Months Ended
October 31,

 

 

 

2004

 

2005

 

2004

 

2005

 

Net income available to common stockholders, as reported

 

$

2,562

 

$

3,303

 

$

4,567

 

$

5,561

 

Deduct: Total stock-based compensation expense determined under fair value based method, net

 

461

 

687

 

837

 

992

 

Net income available to common stockholders, pro forma

 

$

2,101

 

$

2,616

 

$

3,730

 

$

4,569

 

 

 

 

 

 

 

 

 

 

 

Basic income per common share:

 

 

 

 

 

 

 

 

 

As reported

 

$

0.10

 

$

0.13

 

$

0.19

 

$

0.22

 

Pro forma

 

$

0.09

 

$

0.10

 

$

0.15

 

$

0.18

 

Diluted income per common share:

 

 

 

 

 

 

 

 

 

As reported

 

$

0.10

 

$

0.13

 

$

0.18

 

$

0.22

 

Pro forma

 

$

0.08

 

$

0.10

 

$

0.15

 

$

0.18

 

 

12.          SEGMENT REPORTING

 

SFAS No. 131, Disclosures about Segments of an Enterprise and Related Information, establishes standards for reporting information about operating segments in financial statements.  In general, SFAS No. 131 requires that business entities report selected information about operating segments in a manner consistent with that used for internal management reporting.  Effective November 1, 2004 the Eastern region was divided into the North Eastern and South Eastern regions because of a change in the Company’s internal reporting structure.  Segment data for the three and six months ended October 31, 2004 has been revised to reflect changes in the Company’s segment classifications.

 

The Company classifies its operations into North Eastern, South Eastern, Central, Western and FCR Recycling.  The Company’s revenues in the North Eastern, South Eastern, Central and Western segments are derived mainly from one industry segment, which includes the collection, transfer, recycling and disposal of non-hazardous solid waste.  The North Eastern region also includes Maine Energy, which generates electricity from non-hazardous solid waste. The Company’s revenues in the FCR Recycling segment are derived from integrated waste handling services, including processing and recycling of paper, metals, aluminum, plastics and glass.  Included in “Other” are ancillary operations, mainly major customer accounts.

 

15



 

 

 

North Eastern

 

South Eastern

 

Central

 

Western

 

FCR

 

 

 

Region

 

Region

 

Region

 

Region

 

Recycling

 

Three Months Ended October 31, 2004 (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Outside revenues

 

$

23,796

 

$

24,608

 

$

29,143

 

$

24,703

 

$

20,246

 

Depreciation and amortization

 

4,768

 

4,155

 

3,863

 

3,402

 

914

 

Operating income

 

2,497

 

(1,721

)

5,336

 

3,794

 

3,269

 

Total assets

 

$

172,022

 

$

136,680

 

$

122,213

 

$

146,976

 

$

55,112

 

 

 

 

Other

 

Total

 

 

 

 

 

 

 

Three Months Ended October 31, 2004 (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Outside revenues

 

$

3,885

 

$

126,381

 

 

 

 

 

 

 

Depreciation and amortization

 

473

 

17,575

 

 

 

 

 

 

 

Operating income

 

(419

)

12,756

 

 

 

 

 

 

 

Total assets

 

$

67,944

 

$

700,947

 

 

 

 

 

 

 

 

 

 

North Eastern

 

South Eastern

 

Central

 

Western

 

FCR

 

 

 

Region

 

Region

 

Region

 

Region

 

Recycling

 

Three Months Ended October 31, 2005

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Outside revenues

 

$

28,065

 

$

23,925

 

$

31,239

 

$

26,817

 

$

22,138

 

Depreciation and amortization

 

4,687

 

3,206

 

4,068

 

3,369

 

1,126

 

Operating income

 

2,702

 

484

 

5,199

 

3,041

 

2,845

 

Total assets

 

$

180,783

 

$

142,616

 

$

134,196

 

$

161,060

 

$

86,501

 

 

 

 

Other

 

Total

 

 

 

 

 

 

 

Three Months Ended October 31, 2005

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Outside revenues

 

$

4,611

 

$

136,795

 

 

 

 

 

 

 

Depreciation and amortization

 

458

 

16,914

 

 

 

 

 

 

 

Operating income

 

(565

)

13,706

 

 

 

 

 

 

 

Total assets

 

$

64,650

 

$

769,806

 

 

 

 

 

 

 

 

16



 

 

 

North Eastern

 

South Eastern

 

Central

 

Western

 

FCR

 

 

 

Region

 

Region

 

Region

 

Region

 

Recycling

 

Six Months Ended October 31, 2004 (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Outside revenues

 

$

47,211

 

$

48,489

 

$

57,835

 

$

48,682

 

$

39,845

 

Depreciation and amortization

 

9,810

 

8,198

 

7,409

 

6,568

 

1,839

 

Operating income

 

3,500

 

(2,343

)

11,260

 

7,612

 

6,108

 

Total assets

 

$

172,022

 

$

136,680

 

$

122,213

 

$

146,976

 

$

55,112

 

 

 

 

Other

 

Total

 

 

 

 

 

 

 

Six Months Ended October 31, 2004 (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Outside revenues

 

$

7,991

 

$

250,053

 

 

 

 

 

 

 

Depreciation and amortization

 

974

 

34,798

 

 

 

 

 

 

 

Operating income

 

(725

)

25,412

 

 

 

 

 

 

 

Total assets

 

$

67,944

 

$

700,947

 

 

 

 

 

 

 

 

 

 

North Eastern

 

South Eastern

 

Central

 

Western

 

FCR

 

 

 

Region

 

Region

 

Region

 

Region

 

Recycling

 

Six Months Ended October 31, 2005

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Outside revenues

 

$

55,661

 

$

48,322

 

$

60,750

 

$

52,339

 

$

42,637

 

Depreciation and amortization

 

9,427

 

6,116

 

7,813

 

6,586

 

2,215

 

Operating income

 

4,568

 

1,006

 

9,881

 

6,421

 

5,850

 

Total assets

 

$

180,783

 

$

142,616

 

$

134,196

 

$

161,060

 

$

86,501

 

 

 

 

Other

 

Total

 

 

 

 

 

 

 

Six Months Ended October 31, 2005

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Outside revenues

 

$

9,086

 

$

268,795

 

 

 

 

 

 

 

Depreciation and amortization

 

890

 

33,047

 

 

 

 

 

 

 

Operating income

 

(958

)

26,768

 

 

 

 

 

 

 

Total assets

 

$

64,650

 

$

769,806

 

 

 

 

 

 

 

 


(1) Effective in fiscal year 2006, the Company has modified its internal reporting of the measurement of segment profit or loss.  Segment data for the three and six months ended October 31, 2004 has been conformed to reflect this modification.

 

Amounts of the Company’s total revenue attributable to services provided are as follows:

 

 

 

Three Months Ended
October 31,

 

Six Months Ended
October 31,

 

 

 

2004 (1)

 

2005

 

2004 (1)

 

2005

 

Collection

 

$

62,156

 

$

66,152

 

$

123,846

 

$

131,419

 

Landfill/disposal facilities

 

22,091

 

26,498

 

42,525

 

49,761

 

Transfer

 

11,520

 

11,913

 

23,116

 

23,562

 

Recycling

 

30,614

 

32,232

 

60,566

 

64,053

 

Total revenues

 

$

126,381

 

$

136,795

 

$

250,053

 

$

268,795

 

 


(1)   Revenue attributable to services provided for the three and six months ended October 31, 2004 has

 

17



 

been revised to conform with the classification of revenue attributable to services provided in the current fiscal year.

 

13.          NET ASSETS UNDER CONTRACTUAL OBLIGATION

 

Effective June 30, 2003, the Company transferred its domestic brokerage operations as well as a commercial recycling business to former employees who had been responsible for managing those businesses.  Consideration for the transaction was in the form of two notes receivable amounting up to $6,925.  These notes are payable within twelve years of the anniversary date of the transaction to the extent of free cash flow generated from the operations.

 

Effective August 1, 2005, the Company transferred a certain Canadian recycling operation to a former employee who had been responsible for managing that business.  Consideration for this transaction was in the form of a note receivable amounting up to $1,313 which is payable within six years of the anniversary date of the transaction to the extent of free cash flow generated from the operations.

 

The Company has not accounted for these transactions as sales based on an assessment that the risks and other incidents of ownership have not sufficiently transferred to the buyers. The net assets of the operations are disclosed in the balance sheet as “net assets under contractual obligation”, and are being reduced as payments are made.

 

Net assets under contractual obligation amounted to $1,392 and $1,369 at April 30, 2005 and October 31, 2005, respectively.

 

14.          CONDENSED CONSOLIDATING FINANCIAL INFORMATION

 

The Company’s senior subordinated notes due 2013 are guaranteed jointly and severally, fully and unconditionally by the Company’s significant wholly-owned subsidiaries. The Parent is the issuer and non-guarantor of the senior subordinated notes. The information which follows presents the condensed consolidating financial position as of April 30, 2005 and October 31, 2005, and the condensed consolidating results of operations for the three and six months ended October 31, 2004 and 2005 and the condensed consolidating statements of cash flows for the six months ended October 31, 2004 and 2005 of (a) the Parent company only, (b) the combined guarantors (“the Guarantors”), each of which is 100% wholly-owned by the Parent, (c) the combined non-guarantors (“the Non-Guarantors”), (d) eliminating entries and (e) the Company on a consolidated basis.

 

18



 

CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF APRIL 30, 2005

(In thousands, except for share and per share data)

 

 

 

Parent

 

Guarantors

 

Non -
Guarantors

 

Elimination

 

Consolidated

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

(2,383

)

$

10,146

 

$

815

 

$

 

$

8,578

 

Restricted cash

 

 

70

 

 

 

70

 

Accounts receivable - trade, net of allowance for doubtful accounts

 

76

 

50,998

 

652

 

 

51,726

 

Refundable income taxes

 

874

 

 

 

 

874

 

Inventory

 

 

2,538

 

 

 

2,538

 

Other current assets

 

596

 

4,161

 

840

 

 

5,597

 

Total current assets

 

(837

)

67,913

 

2,307

 

 

69,383

 

 

 

 

 

 

 

 

 

 

 

 

 

Property, plant and equipment, net of accumulated depreciation and amortization

 

2,928

 

411,506

 

(1,681

)

 

412,753

 

Goodwill

 

 

157,492

 

 

 

157,492

 

Deferred income taxes

 

3,155

 

 

 

 

3,155

 

Investment in subsidiaries

 

(18,424

)

 

 

18,424

 

 

Net assets under contractual obligation

 

 

1,392

 

 

 

1,392

 

Other non-current assets

 

25,430

 

36,287

 

10,941

 

(4,379

)

68,279

 

 

 

13,089

 

606,677

 

9,260

 

14,045

 

643,071

 

 

 

 

 

 

 

 

 

 

 

 

 

Intercompany receivable

 

587,569

 

(589,512

)

(2,436

)

4,379

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

599,821

 

$

85,078

 

$

9,131

 

$

18,424

 

$

712,454

 

 

 

 

Parent

 

Guarantors

 

Non -
Guarantors

 

Elimination

 

Consolidated

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

 

 

 

 

 

 

Current maturities of long - term debt

 

$

 

$

281

 

$

 

$

 

$

281

 

Accounts payable

 

1,425

 

44,654

 

28

 

 

46,107

 

Accrued payroll and related expenses

 

2,243

 

7,320

 

125

 

 

9,688

 

Accrued interest

 

4,816

 

2

 

 

 

4,818

 

Deferred income taxes

 

1,419

 

 

 

 

1,419

 

Current accrued closure and post-closure costs

 

 

4,748

 

542

 

 

5,290

 

Other current liabilities

 

3,975

 

10,474

 

10,702

 

 

25,151

 

 

 

 

 

 

 

 

 

 

 

 

 

Total current liabilities

 

13,878

 

67,479

 

11,397

 

 

92,754

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-term debt, less current maturities

 

377,760

 

676

 

 

 

378,436

 

Other long-term liabilities

 

1,437

 

30,085

 

2,996

 

 

34,518

 

 

 

 

 

 

 

 

 

 

 

 

 

COMMITMENTS AND CONTINGENCIES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Series A redeemable, convertible preferred stock, authorized - 55,750, issued and outstanding - 53,750, liquidation preference of $1,000 per share plus accrued but unpaid dividends

 

67,964

 

 

 

 

67,964

 

 

 

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS’ EQUITY:

 

 

 

 

 

 

 

 

 

 

 

Class A common stock -
Authorized - 100,000,000 shares, $0.01 par value; issued and outstanding - 23,860,000 shares

 

239

 

101

 

100

 

(201

)

239

 

Class B common stock -
Authorized - 1,000,000 shares, $0.01 par value, 10 votes per share, issued and outstanding - 988,000 shares

 

10

 

 

 

 

10

 

Accumulated other comprehensive income

 

767

 

1,276

 

(53

)

(1,223

)

767

 

Additional paid-in capital

 

274,088

 

48,035

 

2,596

 

(50,631

)

274,088

 

Accumulated deficit

 

(136,322

)

(62,574

)

(7,905

)

70,479

 

(136,322

)

Total stockholders’ equity

 

138,782

 

(13,162

)

(5,262

)

18,424

 

138,782

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

599,821

 

$

85,078

 

$

9,131

 

$

18,424

 

$