false0000911177 0000911177 2019-08-01 2019-08-01

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

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FORM 8-K

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CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 1, 2019

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Casella Waste Systems, Inc.

(Exact Name of Registrant as Specified in Charter)

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Delaware		000-23211		03-0338873
(State or Other Jurisdiction of Incorporation)		(Commission File Number)		(IRS 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

Not applicable

(Former Name or Former Address, if Changed Since Last Report)

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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Class A common stock, $0.01 par value per share		CWST		The NASDAQ Stock Market LLC
				(NASDAQ Global Select Market)

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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Item 2.02	Results of Operations and Financial Condition.

On August 1, 2019, Casella Waste Systems, Inc. (the “Company”) issued a press release announcing its financial results for the second quarter ended June 30, 2019. The full text of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.  

The information in this Item 2.02 of this Form 8-K (including Exhibit 99.1) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Item 9.01	Financial Statements and Exhibits.

(d) Exhibits.    

EXHIBIT INDEX

Exhibit No.		Exhibit Description
99.1		Press Release of Casella Waste Systems, Inc. dated August 1, 2019.
101.SCH		Inline XBRL Taxonomy Extension Schema Document.**
101.CAL		Inline XBRL Taxonomy Calculation Linkbase Document.**
101.LAB		Inline XBRL Taxonomy Label Linkbase Document.**
101.PRE		Inline XBRL Taxonomy Presentation Linkbase Document.**
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document.**
104		Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101).
**		Submitted Electronically Herewith.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

		CASELLA WASTE SYSTEMS, INC.
Date: August 1, 2019		By:		/s/ Edmond R. Coletta
				Edmond R. Coletta
				Senior Vice President and Chief Financial Officer

2

•	The Company raises its revenue, net income and Adjusted EBITDA* guidance ranges and reaffirms its net cash provided by operations and Normalized Free Cash Flow* guidance ranges for the fiscal year ending December 31, 2019 (“fiscal 2019”).

•	Revenues were $187.5 million for the quarter, up $21.8 million, or up 13.2%, from the same period in 2018.

•	Overall solid waste pricing for the quarter was up 5.1%, driven by strong collection pricing, up 5.5%, and robust landfill pricing, up 6.0%, from the same period in 2018.

•	Net income was $11.9 million for the quarter, up $10.2 million, or up 599.2%, from the same period in 2018.

•	Adjusted EBITDA was $40.4 million for the quarter, up $3.3 million, or up 8.9%, from the same period in 2018.

•	The Company has acquired approximately $18.5 million of annualized revenues year-to-date, and as previously announced has signed an asset purchase agreement for the acquisition of assets generating approximately $30.0 million of annualized revenues, which is expected to be completed in the third quarter.

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•	Revenues between $720 million and $735 million (raised from $710 million and $725 million);

•	Net income between $35 million and $39 million (raised from $34 million and $38 million);

•	Adjusted EBITDA between $153 million and $157 million (raised from $152 million and $156 million);

•	Net cash provided by operating activities between $111 million and $115 million; and

•	Normalized Free Cash Flow between $51 million and $55 million.

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(i)	We established a reserve associated with settlement of the Town of Charlton's claim against us.

(ii)	We incurred legal costs as well as other costs associated with various matters as part of the Southbridge Landfill closure.

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(i)	The aggregate tax effect of the adjustments, including any impact of deferred tax adjustments.

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(i)

Effective January 1, 2019, as a part of implementing ASC Topic 842, Leases, cash payments on landfill operating lease contracts, which historically were capitalized as property, plant and equipment and presented in the Condensed Consolidated Statements of Cash Flows as cash outflows from investing activities, are classified as cash flows from operating activities that reduce net cash provided by operating activities.

(ii)	Includes a contract settlement cash outlay associated with exiting a contract.

(iii)	Includes cash outlays associated with the Southbridge Landfill closure and the Potsdam, New York environmental site remediation. The six months ended June 30, 2019 includes $1,378 for Southbridge landfill closure costs in the three months ended March 31, 2019 that were not previously reflected in landfill closure, site improvement and remediation.

(iv)	Includes cash outlays associated with acquisition activities.

(v)	Includes deposits for capital expenditures related to new development activities.

(vi)	Includes capital expenditures related to acquisitions and other non-recurring items.

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(i)

Our credit agreement requires us to maintain a maximum consolidated net leverage ratio, to be measured at the end of each fiscal quarter ("Consolidated Net Leverage Ratio"). The Consolidated Net Leverage Ratio is calculated as consolidated long-term debt and finance leases, net of unencumbered cash and cash equivalents in excess of $2,000 ("Consolidated Funded Debt, Net", calculated at $495,584 as of June 30, 2019, or $496,741 of consolidated long-term debt and finance leases, less $1,157 of cash and cash equivalents in excess of $2,000 as of June 30, 2019), divided by consolidated EBITDA as defined by our credit agreement ("Consolidated EBITDA"). Consolidated EBITDA is based on operating results for the twelve months preceding the measurement date of June 30, 2019. A reconciliation of Consolidated EBITDA from Net cash provided by operating activities is as follows:

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(i)

Effective January 1, 2019, as a part of implementing ASC Topic 842, Leases, cash payments on landfill operating lease contracts, which historically were capitalized as property, plant and equipment and presented in the Condensed Consolidated Statements of Cash Flows as cash outflows from investing activities, are classified as cash flows from operating activities that reduce net cash provided by operating activities.

(ii)	Includes cash outlays associated with the Southbridge Landfill closure and the Potsdam, New York environmental site remediation.

(iii)	Includes cash outlays associated with acquisition activities.

(iv)	Includes deposits for capital expenditures related to new development activities.

(v)	Includes capital expenditures related to acquisitions and other non-recurring items.

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(i)	The Company's capital expenditures are broadly defined as pertaining to either growth, replacement or non-recurring activities. Growth capital expenditures are defined as costs related to development of new airspace, permit expansions, and new recycling contracts along with incremental costs of equipment and infrastructure added to further such

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