DEFA14A

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

 

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.     )

 

 

Filed by the Registrant   x                             Filed by a Party other than the Registrant  ¨

Check the appropriate box:

 

¨   Preliminary Proxy Statement
¨   Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
¨   Definitive Proxy Statement
¨   Definitive Additional Materials
x   Soliciting Material Pursuant to §240.14a-12

CASELLA WASTE SYSTEMS, INC.

(Name of Registrant as Specified in Its Charter)

 

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Copies to:

 

Jeffrey A. Stein

Wilmer Cutler Pickering Hale and Dorr LLP

60 State Street

Boston, Massachusetts 02109

(617) 526-6000

 

Keith E. Gottfried, Esq.

Morgan, Lewis & Bockius LLP

1111 Pennsylvania Avenue, N.W.

Washington, DC 20004-2541

(202) 739-5947

Payment of Filing Fee (Check the appropriate box):

x   No fee required.
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Casella Waste Systems, Inc., a Delaware corporation (“Casella” or the “Company”), is filing materials contained in this Schedule 14A with the U.S. Securities and Exchange Commission (“SEC”) in connection with the solicitation of proxies from its stockholders in connection with its 2015 Annual Meeting of Stockholders to be held on Friday, November 6, 2015 and at any and all adjournments or postponements thereof (the “2015 Annual Meeting”). Casella has not yet filed a preliminary or definitive proxy statement with the SEC in connection with its solicitation of proxies to be used at the 2015 Annual Meeting.

Slide Presentation First Used On August 11, 2015

Attached hereto as Exhibit 1 is a copy of the slide presentation to be presented and distributed by Casella in connection with investor meetings and presentations at the Jefferies 2015 Industrials Conference to be held on Tuesday, August 11, 2015 at the Grand Hyatt hotel in New York, New York. This slide presentation may also be used from time to time after August 11, 2015 in presentations or meetings with current and potential investors. This presentation is being filed herewith because it may be deemed to be solicitation material in respect of the potential solicitation of proxies to be used at the 2015 Annual Meeting.

Important Additional Information And Where To Find It

Casella, its directors and certain of its executive officers are deemed to be participants in the solicitation of proxies from the Company’s stockholders in connection with the matters to be considered at the Company’s 2015 Annual Meeting of Stockholders. Information regarding the names of the Company’s directors and executive officers and their respective interests in the Company by security holdings or otherwise can be found in the Company’s Form 10-KT/A for the transition period from May 1, 2014 to December 31, 2014, filed with the SEC on April 30, 2015. To the extent holdings of the Company’s securities have changed since the amounts set forth in the Company’s Form 10-KT/A for the transition period from May 1, 2014 to December 31, 2014, such changes have been reflected on Initial Statements of Beneficial Ownership on Form 3 or Statements of Change in Ownership on Form 4 filed with the SEC. These documents are available free of charge at the SEC’s website at www.sec.gov. Casella intends to file a proxy statement and accompanying WHITE proxy card with the SEC in connection with the solicitation of proxies from Casella stockholders in connection with the matters to be considered at the Company’s 2015 Annual Meeting of Stockholders. Additional information regarding the identity of participants, and their direct or indirect interests, by security holdings or otherwise, will be set forth in the Company’s proxy statement for its 2015 Annual Meeting, including the schedules and appendices thereto. INVESTORS AND STOCKHOLDERS ARE STRONGLY ENCOURAGED TO READ ANY SUCH PROXY STATEMENT AND THE ACCOMPANYING PROXY CARD AND OTHER DOCUMENTS FILED BY CASELLA WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE AS THEY WILL CONTAIN IMPORTANT INFORMATION. Stockholders will be able to obtain the Proxy Statement, any amendments or supplements to the Proxy Statement, the accompanying WHITE proxy card, and other documents filed by Casella with the SEC for no charge at the SEC’s website at www.sec.gov. Copies will also be available at no charge at the Investor Relations section of the Company’s corporate website at www.casella.com, by writing to the Company’s Corporate Secretary at Casella Waste Systems, Inc., 25 Greens Hill Lane, Rutland, VT 05701, or by calling the Company’s Corporate Secretary at (802) 772-2257.

EX-1
Casella Waste Systems, Inc.
Investor Presentation
August 2015
Exhibit 1


2
2
and other targets; landfill operations and permit status may be affected
by factors outside our control; we may be required to incur capital
expenditures in excess of our estimates; fluctuations in energy pricing or
the commodity pricing of our recyclables may make it more difficult for
us to predict our results of operations or meet our estimates; actions of
activist investors and the cost and disruption of responding to those
actions; and we may incur environmental charges or asset impairments
in the future. There are a number of other important risks and
uncertainties that could cause our actual results to differ materially from
those indicated by such forward-looking statements. These additional
risks and uncertainties include, without limitation, those detailed in Item
1A, “Risk Factors” in our Form 10-KT for the transition period ended
December 31, 2014 and in our Form 10-Q for the quarterly period ended
June 30, 2015.
We undertake no obligation to update publicly any forward-looking
statements whether as a result of new information, future events or
otherwise, except as required by the federal securities laws.
Safe harbor statement
Certain matters discussed in this presentation are "forward-looking
statements" intended to qualify for the safe harbors from liability
established by the Private Securities Litigation Reform Act of 1995.
These forward-looking statements can generally be identified as such by
the context of the statements, including words such as “believe,”
“expect,” “anticipate,” “plan,” “may,” “would,” “intend,” “estimate,”
“guidance” and other similar expressions, whether in the negative or
affirmative. These forward-looking statements are based on current
expectations, estimates, forecasts and projections about the industry
and markets in which we operate and management’s beliefs and
assumptions. We cannot guarantee that we actually will achieve the
plans, intentions, expectations or guidance disclosed in the forward-
looking statements made. Such forward-looking statements, and all
phases of our operations, involve a number of risks and uncertainties,
any one or more of which could cause actual results to differ materially
from those described in our forward-looking statements. Such risks and
uncertainties include or relate to, among other things: adverse weather
conditions that have negatively impacted and may continue to negatively
impact our revenues and our operating margin; current economic
conditions that have adversely affected and may continue to adversely
affect our revenues and our operating margin; we may be unable to
increase volumes at our landfills or improve our route profitability; our
need to service our indebtedness may limit our ability to invest in our
business; we may be unable to reduce costs or increase pricing or
volumes sufficiently to achieve estimated Adjusted EBITDA


Casella Waste Systems
3
Casella Waste Systems -
Overview
Casella provides integrated solid waste, recycling and resource services.
$535.8 mm of revenues for LTM ended 6/30/15.
Integrated operations located in six northeast states.
Focused on providing customers with waste and resource solutions.
Waste and resource assets are well positioned in the northeast.
Robust transfer network allows us to
effectively move waste and recyclables
to our disposal & processing facilities.
Provide customers with value-added
resource solutions through our Recycling,
Organics, and Customer Solutions
operations.


4
35 Collection Operations
18 Recycling Facilities
10 Disposal Facilities
(1)
4 Landfill Gas-to-Energy
44 Transfer Stations
Casella Service Area
Note: Total disposal capacity includes permitted and permittable airspace estimates at each site as of December 31, 2014.
(1)
Includes nine Subtitle D landfills and one landfill permitted to accept construction and demolition materials.
(2)
Annual capacity does not reflect the 1.5 million tons per year rail permit at McKean LF.
Hakes LF
462k tons/yr
4.0mm tons capacity
Chemung LF
200.5k tons/yr
6.8mm tons capacity
Hyland LF
312k tons/yr
14.6mm tons capacity
Clinton LF
175k tons/yr
15.7mm tons capacity
WasteUSA LF
600k tons/yr
14.4mm tons capacity
NCES LF
No annual cap
1.8mm tons capacity
Juniper Ridge LF
No annual cap
23.8mm tons capacity
Southbridge LF
405k tons/yr
7.0mm tons capacity
Ontario LF
918k tons/yr
12.8mm tons capacity
McKean LF
(2)
312k tons/yr
2.1mm tons capacity
Company Overview
Casella Waste Systems


Casella Waste Systems
5
Strong execution of key strategies since Dec 2012
(1)
Excludes low priced soils at the Worcester landfill closure project.
Strategic Focus since Dec 2012
Results
#1 -
Executing leadership changes
New
President/COO and CFO in Dec 2012
#2 -
Sourcing incremental landfill                         
volumes
Annual
Landfill
volumes
up
+716k
tons
since
FY
2013
(1)
Annual
Disposal
AEBITDA
up
+$15.8mm
since
FY
2013
(1)
#3 -
Driving additional profitability of
collection operations
Pricing programs continue to drive value; with Residential
& Commercial pricing up +4.3% in Q2 2015
Focused on operational efficiency programs
#4 -
Executing Eastern Region strategy
AEBITDA margins up from 15.0% LTM 10/31/12 to
over 22% LTM 6/30/15
Repositioned assets and improved operations
#5 -
Reducing business risk
Sold non-core, non-performing operations (Maine
Energy, BioFuels, GreenFiber, CARES assets)
Changed fiscal year end to better match business cycle
Refinanced Revolver in Feb 2015 (new maturity 2020)
New
municipal
contracts;
MSW
permit
at
Juniper
Ridge LF; expanded Southbridge LF; sold
BioFuels; acquired BBI; sold Maine Energy


Casella Waste Systems
Results since FY 2013:
Revenue growth +$80.5mm (or +17.7%)
mainly driven by Disposal (+$39.7mm)
(2)
,
Collection (+$23.6mm), and Customer
Solutions (+$18.2mm).
Adj. EBITDA up +$12.5mm (or +14.2%)
mainly driven by higher landfill volumes and
strategic execution.
Landfill tons up +716k annually (or +20.1%),
while increasing pricing by +2.5%.
(3)
Residential and Commercial collection price
increases accelerating (up +4.3% in Q2 2015).
6
Results up significantly on strategic execution
(1)
Please refer to the appendix for a reconciliation of Adjusted EBITDA
and Adjusted EBITDA Margin to the comparable GAAP numbers.
(2)
Disposal Revenue includes Worcester landfill.
(3)
Excludes low-priced soils at the Worcester landfill closure project.     (4) CY 2015 Guidance as updated/reaffirmed on 7/29/15.
Revenue ($mm)
Adj. EBITDA ($mm) & Margin
(1)
$535
to
$525
$107
to
$103
(4)
(4)
2015
Guidance
FYE
4/30/13
FYE
4/30/14
CYE
12/31/14
LTM
6/30/15


Casella Waste Systems
Collection
43.3%
Disposal
27.6%
Energy &
Processing
2.8%
Recycling
8.9%
Organics
7.4%
Customer
Solutions
10.0%
~74% revenues in Solid Waste.
Solid Waste consists of integrated collection,
transfer, landfill, energy, and processing.
Margin improvement driven by higher landfill
tons, pricing, cost efficiencies, and asset
repositioning.
Target Adj. EBITDA margins > 27% in 2018.
~26% revenues in Resource Solutions.
(1)
Resource Solutions consists of recycling,
organics, and Customer Solutions operations.
Recycling margins down on lower commodity
pricing; working to improve with SRA Fee,
contract resets, and operating efficiencies.
Organics margins flat; low margin, high return
business.
Customer Solution margins up on Industrials
growth and higher G&A leverage. 
7
Solid Waste operations driving improving margins
(1)
Resource Solutions includes revenues derived from the Recycling, Organics, and Customer Solutions business units.
LTM 6/30/15 –
Revenue Splits
(1)
Solid Waste Adjusted EBITDA Margins
FYE
4/30/13
FYE
4/30/14
CYE
12/31/14
LTM
6/30/15


Casella Waste Systems
Strategic plan expected to drive significant shareholder value
8
Management focused in key areas to increase free cash flow and to
reduce debt leverage:
Creating incremental value through Resource Solutions
3
1
Increasing landfill returns
2
Driving additional profitability in collection operations
Improving balance sheet and reducing risk
4


Casella Waste Systems
Strategic plan expected to drive significant shareholder value
Plan focused on improving Free Cash Flow and reducing debt leverage:
CY 2015
Guidance Range
(1)
CY 2018
Financial Targets
Revenues
$525mm
to $535mm
CAGR 1.7%
to 2.6%
Adjusted
EBITDA
(2)
$103mm
to $107mm
$122mm
to $132mm
Free Cash Flow
(2)
$15mm
to $19mm
$30mm
to $40mm
Total Debt-to-EBITDA
(3)
N/A
3.25x to 3.75x
Capital
Expenditures
$45mm
to $48mm
(8.6% to 9.0% of revenues)
8.7% to 9.5% of
revenues
____________________
(1)
CY 2015 Guidance as updated/reaffirmed on 7/29/15.
(2)
Adjusted EBITDA and Free Cash Flow as defined in the appendix reconciliation.
(3)
Total
Debt-to-EBITDA
as
defined
as
Consolidated
Leverage
Ratio”
in
the
Company’s
Loan
&
Security
Agreement
dated
as
of
2/27/15
(“ABL
Revolver”).
9


Casella Waste Systems
Adjusted EBITDA Bridge ($mm)
10
Strategic initiatives expected to drive profitable growth
$132 to
$122
$87.8
$95.1
FYE
4/30/13
FYE
4/30/14
2015
Guidance
2018
Target
Eastern LF price
(+350bps/yr in
excess of CPI)
Western LF volumes
(+200k to +400k
tons/yr)
Focus on operating
efficiencies
Improve margins by
+80 to +120bps/yr
Focus on pricing,
operating efficiencies
and selling/swapping
under-performing
routes
Recycling focus on
driving returns (SRA
fee, increased 3
party tipping fees,
and efficiencies)
Customer Solutions
focus on industrial
services growth
Unidentified
downsides to
projections
+$10 to +$18
+$11 to +$15
+$6 to +$7
($10) to ($13)
#1 -
Landfills
#2 -
Collection
#3 -
Resource Solutions
Other
$107 to
$103
Upsides not included in plan:
McKean landfill rail infrastructure
Recovery of commodity pricing
(recycling or energy)
Additional landfill volumes in East
rd


Casella Waste Systems
Landfill Highlights:
Casella controls 10 landfills in strategic locations
across the Northeast.
Total disposal capacity ~103 mm tons.
(2)
Total annual landfill volumes up +716k tons
(or +20.1%) since FY 2013.
Roughly 0.5mm tons of excess annual
permitted capacity at 6/30/15.
Average price per ton up +4.9% in Q2 2015,
with strong pricing in Eastern Region (+6.2%).
11
Annual Landfill Volumes (mm Tons) and
Average Price per Ton
(1)
(1)
Annual Landfill Disposal Volumes includes amortizable and non-amortizable tons, excludes low-priced soils at the Worcester landfill closure project.
(2)
Includes both permitted and permittable
airspace at landfills.
3.6
3.9
4.2
/ton
1
Increasing landfill returns
1.5
2.8
4.3


Casella Waste Systems
12
Strategy capitalizes on improving market and asset positioning to further
improve landfill returns.
Eastern Region –
focus on pricing; capacity constraints provide tailwind. Goal to increase
pricing +350bps/yr in excess of inflation.
Western Region –
focus on maximizing capacity utilization; high margin incremental tons.
Goal to increase annual tons by +200k to +400k tons/yr.
Market dynamics are improving across our footprint area.
Disposal site closures (and expected closures) are creating a supply-demand imbalance. 
Within our footprint, roughly 1.5mm tons/yr of disposal capacity has closed since Dec 2012,
and an additional 1.3mm tons/yr is expected to permanently close in the next couple years,
offset by 0.4mm tons/yr of new disposal capacity (= net closure of 2.4mm tons/yr).
NYC Dept of Sanitation contracts expected to shift roughly +1.0mm tons/yr of additional
waste to competitor landfills in upstate NY (reducing excess capacity in market).
Tullytown
closure in Eastern PA expected to remove over 2.5mm tons/yr of landfill capacity.
1
Increasing landfill returns -
continued


2
3
4
1
Fall River LF
376k tons/yr,
Closed 2014
Disposal market dynamics are shifting
13
Hyland LF
312k tons/yr
14.6mm tons capacity
Clinton LF
175k tons/yr
15.7mm tons capacity
WasteUSA LF
600k tons/yr
14.4mm tons capacity
NCES LF
No annual cap
1.8mm tons capacity
Juniper Ridge LF
No annual cap
23.8mm tons capacity
Southbridge LF
405k tons/yr
7.0mm tons capacity
Ontario LF
918k tons/yr
12.8mm tons capacity
McKean LF
(1)
312k tons/yr
2.1mm tons capacity
Moretown LF
286k tons/yr,
Closed 2013
Claremont WTE
73k tons/yr,
Closed 2013
MERC WTE
300k tons/yr,
Closed 2012
PERC WTE
300k tons/yr
PPA expires 2017
Granby LF -
235k tons/yr, Closed 2014
S. Hadley LF
156k tons/yr, Closed 2014
Barre LF -
94k tons/yr, Closing 2015
Northampton LF
50k tons/yr, Closed 2013
Chicopee LF -
365k tons/yr, Closing 2018
2
1
3
4
5
5
Albany LF
275k tons/yr
Closing 2016
Rockland
45k tons/yr,
Closing 2015
Dunn LF
~300k tons/yr
New 2015
Finch LF
130k tons/yr
New 2014
Disposal market in Northeast is contracting…
Chemung LF
200.5k tons/yr
6.8mm tons capacity
Hakes LF
462k tons/yr
4.0mm tons capacity
Wallingford WTE
130k tons/yr
Closed 2015
Taunton LF
120k tons/yr
Closing 2018
Note:  Total disposal capacity includes permitted and permittable airspace estimates at each site as of December 31, 2014.
(1)
Annual capacity does not reflect the 1.5mm tons per year rail permit at McKean LF.
NYC Dept of Sanitation
10k –
12k tons per day.
Building 4 marine transfer
stations to transload waste to rail
(1 operational in early 2015).
Expect an additional 1.0m tons/yr
to be disposed in NY.
18 Recycling Facilities
10 Disposal Facilities
35 Collection Operations
Other disposal sites (closed)
Expected NYC waste flows
10 Disposal Facilities
4 Landfill Gas-to-Energy Facilities
2 New Disposal Facilities online
Tullytown
LF
2.5mm tons/yr,
Closing 2017
Other disposal sites (potential to close)
Allegany LF
55k tons/yr
Closing 2016
Casella Waste Systems


Casella Waste Systems
(0.4)
5.0
5.3
5.4
1.3
0.3
2012
2015
2018
Excess
Tons Disposed
Shortfall
Massachusetts
6.3
5.6
Disposal
Capacity
(tons
in
mm)
5.0
(0.2)
3.7
4.2
4.4
0.7
0.3
2012
2015
2018
Excess
Tons Disposed
Shortfall
New York
4.4
4.5
Disposal
Capacity
(tons in mm)
4.2
Vermont, New Hampshire & Maine
16.5
16.6
16.6
Service Area
10 Landfills
4 Landfill Gas-to-Energy
Disposal
Capacity
(tons in mm)
14
Note: Data collected from active landfill and waste to energy facilities from State Annual Facility Reports in October 2014
…creating a supply-demand imbalance
13.6
14.6
15.4
2.9
2.0
1.2
2012
2015
2018
Excess
Tons Disposed


Casella Waste Systems
FYE
4/30/13
FYE
4/30/14
CYE
12/31/14
LTM
6/30/15
Strategies to improve Collection
margins by +80 to 120bps/yr:
1)
Pricing over inflation;
2)
Operating efficiencies; and
3)
Selling or swapping under-performing
routes or operations.
15
Collection Adjusted EBITDA Margins
(1)
(1)
Collection Adjusted EBITDA margins on a last 12 months basis.
Driving additional profitability in collection operations
2


Casella Waste Systems
FYE
4/30/13
FYE
4/30/14
CYE
12/31/14
LTM
6/30/15
(1) Focus on pricing discipline.
Residential and commercial pricing
up +4.3% YOY in Q2 2015.
Decentralized sales model focused on pricing
and quality of revenues. 
Launched an SRA fee in Q2 2015 to offset
lower recycling commodity values.
The roll-off market has shown early signs of
rebounding, with growth in select markets.
16
Collection Price
Driving additional profitability in collection operations -
continued
2
Residential &
Commercial
Price
Collection
Price


Casella Waste Systems
17
2
Driving additional profitability in collection operations –
continued
Collection Cost of Operations as
% of Revenues
(1)
FYE
4/30/13
FYE
4/30/14
CYE
12/31/14
LTM
6/30/15
(2) Focus on operating efficiencies.
Cost of Operations as a % of revenues
down -350bps YOY in Q2 2015.
Route profitability –
improving routing
efficiency with new routing tools, marketing
improving density, equipment choice.
Fleet optimization -
implementing fleet plan to
standardize fleet selection, reduce
maintenance costs, reduce spare ratios, and
solve lingering fleet issues.
Reducing volatility by locking in roughly 45%
of fuel at fixed forward prices.
(3) Focus on selling or swapping
under-performing routes.
Sold low-margin hauling routes for $0.9mm in
total proceeds during Q2 2015.
Completing review for additional opportunities.
(1)
Collection Cost of Operations as a % of Collection Revenues on a last 12 months basis.
-180bps


Casella Waste Systems
Zero-Sort
®
Recycling
Casella operates 6 Zero-Sort MRFs in our integrated footprint.
Mature facilities operating at ~95% of capacity; new Lewiston, ME MRF online in Q2 2015.
Recycling volumes up +10.8% YOY for LTM ended 6/30/15.
(1)
Reshaping business to reduce commodity risk and improve returns through: higher tipping
fees, SRA fee (+$4.9mm when fully implemented in Q1 2016), operating efficiencies, and
contract resets (expect to complete ~50% in next 12 months).
Customer Solutions
Resource solutions for Industrial, Municipal, Institutional, and multi-location Retail customers.
Growth opportunities in the Industrial segment (lower margins with high FCF).
CS revenues up +16.3% YOY for LTM ended 6/30/15.
Casella Organics
Business model is primarily focused on transforming Biosolids into renewable products
for fertilization and landscaping.
Working with partners to transform source separated organics into energy or compost.
18
3
Creating incremental value through Resource Solutions
(1)
Shipped tons from MRFs on a “same store basis” .


Casella Waste Systems
Focused over last 2 ½ years on reducing risk, improving the balance
sheet, and increasing cash flows:
Dec 2012 –
sold Maine Energy for $6.7mm; eliminated negative cash flow operation.
(1)
July 2013 –
sold BioFuels
for $2.0mm; eliminated negative cash flow operation.
Dec 2013 –
sold 50% stake in US GreenFiber
resulting in $3.4mm net cash proceeds;
eliminated non-integrated, negative cash flow operation.
(2)
Dec 2014 –
completed environmental remediation and closure at three sites.
Feb 2015 –
refinanced Senior Secured Revolver with new ABL Revolver (LIBOR +225bps);
moved out maturities 5-yrs and increased financial flexibility.
Mar 2015 –
sold CARES assets and wholly-owned assets/real estate for $3.1mm net cash
proceeds; eliminated non-integrated, negative cash flow operation.
Jun 2015 –
sold low-margin hauling routes for $0.9mm in total proceeds. 
19
(1)
Maine Energy sold for $6.7mm to the City of Biddeford, ME, with the purchase price to be paid in equal annual payments over 20 years. As
part of the transaction, Casella dismantled the facility and remediated the site.
(2)
US GreenFiber sold for $18.0mm gross proceeds, with $3.4mm net proceeds for Casella’s 50% equity interest.
Improving balance sheet and reducing risk
4


Casella Waste Systems
Focused on improving Free Cash Flow:
Free Cash Flow +$10.8mm YTD 6/30/15.
Strategic actions taken since Dec 2012 have
reduced risk and improved cash flows.
Plan to use excess cash to repay high cost debt
and for select tuck-in acquisitions/investments.
Driving higher FCF through operating cash
flows, lower interest costs, and maintaining
strict capital discipline.
Capital Expenditures at 9.0% of revenues for
CY 2015 guidance, roughly industry average.
Tax loss carryforwards will help to accelerate
delevering
(as of 12/31/14, $89.5mm of
Federal NOLs and tax credits).
(3)
20
Strategic execution driving higher Free Cash Flows
Free Cash Flow ($mm)
Capital Expenditures ($mm, as % of revenues)
$48
to
$45
Growth
CapEx
(2)
____________________
(1)
CY 2015 Guidance as updated/reaffirmed on 7/29/15.
(2)
Growth capital expenditures as defined in the Appendix.
(3)
Total tax carryforwards include $83.1mm of Federal NOLs and $6.4mm of Federal tax credits; total
excludes $100.4mm of State NOLs.
(1)
(1)
$15 to $19
+$10.8mm
YTD 6/30/15


Casella Waste Systems
Paid down $18.7mm of debt and reduced
debt leverage by -0.35x in Q2 2015.
(1)
Borrowing Availability $58.8mm on 6/30/15.
(3)
Plan to further pay down debt and reduce leverage
through the remainder of 2015.
Next major debt maturity is the 7.75%
Senior Sub Notes due Feb 2019.
New $190mm ABL Revolver (due Feb 2020)
creates additional financial flexibility.
ABL Revolver allows prepayment of Senior Sub
Notes with excess cash (enabling repayment of our
highest cost debt, 7.75% interest rate).
Continue to add tax-exempt SW Disposal Revenue
bonds to capital structure to reduce cost of long-
term debt (17% of debt after new FAME bonds).
(2)
21
Capital structure provides runway and flexibility to execute strategy
Total Debt ($mm)
Total Debt-to-EBITDA
(1)
____________________
(1)
Total
Debt-to-EBITDA
as
defined
as
Consolidated
Leverage
Ratio”
in
the
Company’s
Loan
&
Security
Agreement dated as of 2/27/15 (“ABL Revolver”); as reconciled in the Appendix.
(2)
As of 6/30/15, $77.0mm of SW Disposal Revenue bonds; expect to close $15.0mm FAME bond on 8/27/15.
(3)
As of 6/30/15, our Borrowing Availability under the ABL Facility was calculated as a borrowing base of
$150.4mm, less revolver borrowings of $64.7mm, less outstanding irrevocable letters of credit totaling
$27.0mm, at which date no amount had been drawn.
4/30/13
4/30/14
12/31/14
6/30/15
4/30/13
4/30/14
12/31/14
6/30/15
87% Fixed
Rate Debt


Casella Waste Systems
22
Casella’s value drivers…
Valuable integrated solid waste assets in
disposal limited Northeast markets.
Management focused on increasing Free
Cash Flow and reducing debt leverage.
Results demonstrate strong execution of plan.
Near term focus of team:
Improving landfill returns;
Driving profitability of collection operations;
Creating value through Resource Solutions;
Improving balance sheet & reducing risk.


Casella Waste Systems
This
presentation
may
be
deemed
to
be
soliciting
material
in
respect
of
the
solicitation
of
proxies
from
stockholders
in
connection
with
Casella
Waste
Systems,
Inc.’s
2015
Annual
Meeting
of
Stockholders.
Casella,
its
directors
and
certain
of
its
executive
officers
are
deemed
to
be
participants
in
the
solicitation
of
proxies
from
the
Company’s
stockholders
in
connection
with
the
matters
to
be
considered
at
the
Company’s
2015
Annual
Meeting
of
Stockholders.
Information
regarding
the
names
of
the
Company’s
directors
and
executive
officers
and
their
respective
interests
in
the
Company
by
security
holdings
or
otherwise
can
be
found
in
the
Company’s
Form
10-KT/A
for
the
transition
period
from
May
1,
2014
to
December
31,
2014,
filed
with
the
SEC
on
April
30,
2015.
To
the
extent
holdings
of
the
Company’s
securities
have
changed
since
the
amounts
set
forth
in
the
Company’s
Form
10-KT/A
for
the
transition
period
from
May
1,
2014
to
December
31,
2014,
such
changes
have
been
reflected
on
Initial
Statements
of
Beneficial
Ownership
on
Form
3
or
Statements
of
Change
in
Ownership
on
Form
4
filed
with
the
SEC.
These
documents
are
available
free
of
charge
at
the
SEC’s
website
at
www.sec.gov.
Casella
intends
to
file
a
proxy
statement
and
accompanying
WHITE
proxy
card
with
the
SEC
in
connection
with
the
solicitation
of
proxies
from
Casella
stockholders
in
connection
with
the
matters
to
be
considered
at
the
Company’s
2015
Annual
Meeting
of
Stockholders.
Additional
information
regarding
the
identity
of
participants,
and
their
direct
or
indirect
interests,
by
security
holdings
or
otherwise,
will
be
set
forth
in
the
Company’s
proxy
statement
for
its
2015
Annual
Meeting,
including
the
schedules
and
appendices
thereto.
INVESTORS
AND
STOCKHOLDERS
ARE
STRONGLY
ENCOURAGED
TO
READ
ANY
SUCH
PROXY
STATEMENT
AND
THE
ACCOMPANYING
PROXY
CARD
AND
OTHER
DOCUMENTS
FILED
BY
CASELLA
WITH
THE
SEC
CAREFULLY
AND
IN
THEIR
ENTIRETY
WHEN
THEY
BECOME
AVAILABLE
AS
THEY
WILL
CONTAIN
IMPORTANT
INFORMATION.
Stockholders
will
be
able
to
obtain
the
Proxy
Statement,
any
amendments
or
supplements
to
the
Proxy
Statement,
the
accompanying
WHITE
proxy
card,
and
other
documents
filed
by
Casella
with
the
SEC
for
no
charge
at
the
SEC’s
website
at
www.sec.gov.
Copies
will
also
be
available
at
no
charge
at
the
Investor
Relations
section
of
the
Company’s
corporate
website
at
www.casella.com,
by
writing
to
the
Company’s
Corporate
Secretary
at
Casella
Waste
Systems,
Inc.,
25
Greens
Hill
Lane,
Rutland,
VT
05701,
or
by
calling
the
Company’s
Corporate
Secretary
at
(802)
772-2257.
23
Additional Information


Casella Waste Systems
Appendix
24


Casella Waste Systems
25
Reconciliation of Adjusted EBITDA
Non-GAAP Reconciliation of Adjusted EBITDA to Net Loss
($ in thousands)
2013
2014
Revenue
455,335
$          
497,633
$          
525,938
$          
535,754
$          
260,292
$          
Net loss
(54,463)
$             
(27,404)
$             
(29,136)
$             
(12,169)
$             
(7,021)
$               
Loss on disposal of discontinued operations, net
-
                          
378
                      
-
                          
-
                          
-
                          
Loss (income) from discontinued operations, net
4,480
                   
(284)
                    
-
                          
-
                          
-
                          
(Benefit) provision for income taxes
(2,526)
                 
1,799
                  
1,340
                  
1,423
                  
914
                     
Other expense (income), net
23,501
                
(436)
                   
1,849
                  
2,348
                  
510
                     
Interest expense, net
41,429
                
37,863
                
38,082
                
39,148
                
20,065
                
Gain on settlement of acquisition related contingent consideration
-
                          
(1,058)
                  
(1,058)
                  
-
                          
-
                          
Loss (gain) from divestiture, acquisition and financing costs
1,410
                   
144
                      
(529)
                   
(553)
                   
-
                          
Severance and reorganization costs
3,709
                  
586
                     
426
                      
(4)
                        
-
                          
Environmental remediation charge
-
                          
400
                      
950
                      
950
                      
-
                          
Development project charge
-
                          
1,394
                   
1,394
                   
-
                          
-
                          
Divestiture transactions
-
                          
7,455
                   
7,455
                   
(5,611)
                  
(5,611)
                  
Depreciation and amortization
56,576
                
60,339
                
61,206
                
60,421
                
29,990
                
Fiscal year-end transition costs
-
                          
-
                          
538
                     
538
                      
-
                          
Proxy contest costs
-
                          
-
                          
-
                          
284
                      
284
                      
Tax settlement costs
679
                      
-
                          
-
                          
-
                          
-
                          
Depletion of landfill operating lease obligations
9,372
                  
9,948
                  
10,725
                
10,046
                
4,359
                  
Interest accretion on landfill and environmental remediation liabilities
3,675
                   
3,985
                   
3,606
                   
3,484
                   
1,704
                   
Adjusted EBITDA
87,842
$            
95,108
$            
96,848
$            
100,305
$          
45,194
$            
Adjusted EBITDA Margin (%)
19.3%
19.1%
18.4%
18.7%
17.4%
12 months ended
Dec. 31, 2014
12 months ended
June 30, 2015
Fiscal Year ended
April 30,
6 months ended 
June 30, 2015


Casella Waste Systems
26
Reconciliation of Free Cash Flow and Capital Expenditure detail
Non-GAAP Reconciliation of Free Cash Flow
($ in thousands)
2013
2014
Net Cash Provided By Operating Activities
43,906
$            
49,642
$            
62,158
$            
63,601
$            
23,889
$            
Capital expenditures
(53,281)
               
(43,326)
               
(67,252)
               
(60,258)
               
(16,311)
               
Payments on landfill operating lease contracts
(6,261)
                 
(6,505)
                 
(5,440)
                 
(5,339)
                 
(1,425)
                 
Proceeds from divestiture transactions
-
                          
-
                          
-
                          
5,335
                   
5,335
                   
Proceeds from sale of property and equipment
883
                      
1,524
                  
815
                     
626
                      
259
                      
Proceeds from property insurance settlement
-
                          
-
                          
-
                          
546
                     
546
                      
Contributions from (distribution to) noncontrolling interest holders
2,531
                  
-
                          
-
                          
(1,495)
                 
(1,495)
                 
Free Cash Flow
(12,222)
$           
1,335
$              
(9,719)
$             
3,016
$              
10,798
$            
Fiscal Year ended
April 30,
12 months ended
Dec. 31, 2014
12 months ended
Jun 30, 2015
6 months ended 
Jun 30, 2015
Capital Expenditure Detail
($ in thousands)
2013
2014
Total Growth Capital Expenditures
12,192
$            
4,664
$              
13,789
$            
11,553
$            
2,449
$              
Replacement Capital Expenditures:
Landfill construction & equipment
29,617
                
24,019
                
23,216
                
19,506
                
5,618
                  
Vehicles, machinery / equipment and containers
8,552
                  
10,465
                
25,102
                
23,719
                
6,707
                  
Facilities
2,254
                  
3,170
                  
3,605
                  
3,318
                  
503
                     
Other
666
                     
1,008
                   
1,540
                   
2,161
                   
1,034
                   
Total Replacement Capital Expenditures
41,089
               
38,662
               
53,463
               
48,704
               
13,862
               
Total Capital Expenditures
53,281
$            
43,326
$            
67,252
$            
60,257
$            
16,311
$            
Fiscal Year ended
April 30,
12 months ended
Dec. 31, 2014
12 months ended
June 30, 2015
6 months ended 
June 30, 2015


Casella Waste Systems
27
Reconciliation of Consolidated Leverage Ratio
Reconciliation of Consolidated EBITDA (as defined by ABL Revolver) to Net cash provided by operating activities
($ in millions)
2013
2014
Net cash provided by operating activities
43.9
$                 
49.6
$                 
62.2
$                 
63.6
$                 
Changes in assets and liabilities, net of effects of acquisitions and divestitures
(0.6)
9.2
(2.2)
(1.4)
Divestiture transactions
-
(7.5)
(6.9)
6.2
Gain on sale of property and equipment
0.4
0.8
0.5
0.2
Gain (loss) on sale of equity method investment
-
0.6
(0.2)
-
Loss on debt extinguishment
(15.6)
-
-
(0.5)
Stock based compensation and related severance expense, net of excess tax benefit
(2.4)
(2.4)
(2.3)
(2.5)
Development project charge
-
(1.4)
(1.4)
-
Impairment of investment
-
-
(2.3)
(2.3)
Loss on derivative instruments
(4.5)
(0.3)
(0.6)
(0.3)
Interest expense, less discount on long-term debt
40.9
37.9
38.2
39.2
Provision for income taxes, net of deferred taxes
1.0
0.2
0.2
0.6
Gain on settlement of acquisition related contigent consideration
-
1.1
1.1
-
EBITDA adjustment as allowed by the ABL Facility agreement
2.8
9.3
7.5
(2.9)
Other adjustments as allowed by the ABL Facility agreement
27.1
4.0
5.3
4.5
Minimum consolidated EBITDA
$                 93.0
$                101.1
$                  99.1
$                104.4
Total Debt
500.0
$               
509.5
$               
537.0
$               
529.9
$               
Consolidated Leverage Ratio (Total Debt-to-EBITDA)
5.37
5.04
5.42
5.08
Fiscal Year ended
April 30,
12 months ended 12 months ended   
Dec. 31, 2014
June 30, 2015