SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549

 
FORM 8-K
 
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 
Date of Report (Date of earliest event reported):  December 8, 2005
 
Casella Waste Systems, Inc.
(Exact Name of Registrant as Specified in Charter)
 
Delaware	 	000-23211	 	03-0338873	
(State or Other Jurisdiction
of Incorporation)	 	(Commission
File Number)	 	(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
 
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
 
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:
 
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 
Item 2.02.  Results of Operations and Financial Condition.
 
On December 7, 2005, Casella Waste Systems, Inc. announced its financial results for the second quarter of fiscal 2006, ended October 31, 2005.  The full text of the press release issued in connection with the announcement is attached as Exhibit 99.1 to this Current Report on Form 8-K.
 
The information in this Form 8-K and the Exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (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 or the Exchange Act, except as expressly set forth by specific reference in such a filing.
 
Item 9.01.  Financial Statements and Exhibits
 
(c)                                  Exhibits
 
The following exhibit relating to Item 2.02 shall be deemed to be furnished, and not filed:
 
99.1                           Press release dated December 7, 2005.
 
2

 
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.

Date: December 8, 2005	CASELLA WASTE SYSTEMS, INC.	

 	By:	/s/ Richard A. Norris	 	
 	 	Richard A. Norris	
 	 	Senior Vice President and Chief Financial Officer	
 
3

 
Exhibit Index
 
Exhibit No.	 	Description	
 	 	 	
99.1	 	Press release dated December 7, 2005.	
 
4

Exhibit 99.1
 
FOR IMMEDIATE RELEASE
 
CASELLA WASTE SYSTEMS, INC. ANNOUNCES SECOND QUARTER FISCAL YEAR 2006 RESULTS
 
RUTLAND, VERMONT (December 7, 2005)—Casella Waste Systems, Inc. (NASDAQ: CWST), a regional, non-hazardous solid waste services company, today reported financial results for the second quarter and first six months of its 2006 fiscal year.
 
Second Quarter Results
 
For the quarter ended October 31, 2005, the company reported revenues of $136.8 million, up $10.4 million, or 8.2 percent over the same quarter last year. The company’s net income per common share was $0.13, up $0.03 over the same quarter last year. Operating income for the quarter was $13.7 million, up $950,000, or 7.4 percent over the same quarter last year. Cash provided by operating activities in the quarter was $14.0 million, down $2.2 million, or 13.3 percent compared to the same quarter last year. The company’s earnings before interest, taxes, depreciation and amortization (EBITDA) were $30.6 million*, essentially unchanged from the same quarter last year.
 
For the six months ended October 31, 2005, the company reported revenues of $268.8 million. The company’s net income per common share was $0.22. Operating income for the six month period was $26.8 million. Cash provided by operating activities for the period was $36.6 million. The company’s earnings before interest, taxes, depreciation and amortization (EBITDA) were $59.8 million*.
 
Highlights of the Quarter
 
 “Our internal growth was solid, even taking into account the fuel and energy headwinds that everyone is facing,” John W. Casella, chairman and chief executive officer, said.
 
 “Business conditions continue to present a mixed set of challenges,” Casella said. “Margin improvement continues to be challenged mainly due to higher transportation and fuel costs.
 
“The company also began operating the Chemung County landfill during the quarter. This is a superb facility right in the heart of our western New York state market.
 
“The landfill’s current utilization rate is 120,000 tons of municipal solid waste (MSW) per year, and we’ve begun efforts to increase the facility’s capacity in accordance with the host community relationship and the public-private partnership,” Casella said.

 
The company said it also believes it will meet the low end of the range of its fiscal year 2006 EBITDA* guidance of $112.0 million to $116.0 million.
 
*Non-GAAP Financial Measures
 
In addition to disclosing financial results prepared in accordance with Generally Accepted Accounting Principles (GAAP), we also disclose free cash flow and earnings before interest, taxes, depreciation and amortization (EBITDA), which are non-GAAP measures.
 
These measures are provided because we understand that certain investors use this information when analyzing the financial position of the solid waste industry, including us. Historically, these measures have been key in comparing operating efficiency of publicly traded companies in the solid waste industry, and assist investors in measuring our ability to meet capital expenditure and working capital requirements. For these reasons we utilize these non-GAAP metrics to measure our performance at all levels. These measures do not represent, and should not be considered as alternatives to cash provided by operating activities as determined in accordance with GAAP. Moreover, these measures do not necessarily indicate whether cash flow will be sufficient for such items as working capital or capital expenditures, or to react to changes in our industry or to the economy generally. Because these measures are not calculated by all companies in the same fashion, they may not be comparable to similarly titled measures reported by other companies.
 
More detailed financial results are contained in the tables accompanying this release.
 
Casella Waste Systems, headquartered in Rutland, Vermont, provides collection, transfer, disposal and recycling services primarily in the northeastern United States.
 
For further information, contact Richard Norris, chief financial officer; or Joseph Fusco, vice president; at (802) 775-0325, or visit the company’s website at http://www.casella.com.
 
The company will host a conference call to discuss these results on Thursday, December 8, 2005 at 10:00 a.m. ET. Individuals interested in participating in the call should dial 719-457-2659 at least 10 minutes before start time. The call will also be webcast; to listen, participants should visit Casella Waste Systems’ website at http://www.casella.com and follow the appropriate link to the webcast. A replay of the call will be available by calling 719-457-0820 (conference code #2066499) before 11:59 p.m. ET, Thursday, December 15, 2005, or by visiting the company’s website.
 
Safe Harbor Statement
 
Certain matters discussed in this press release 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 the Company “believes,” “anticipates,” “expects” or words of similar import. Similarly, statements that describe the Company’s future plans, objectives or goals are forward-looking statements. 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: we may be unable to make acquisitions and otherwise develop additional disposal capacity; continuing weakness in general economic conditions may affect our revenues; increasing fuel costs may affect our cost of operations; we may be required to incur capital expenditures in excess of our estimates; and fluctuations in the commodity pricing of our recyclables may make it more difficult for us to predict our results of operations. Other factors which could materially affect such forward-looking statements can be found in our periodic reports filed with the Securities and Exchange Commission, including certain factors which could affect future operating results detailed in the Management’s Discussion and Analysis section in our Form 10-K for the fiscal year ended April 30, 2005.
 
(tables follow)
 
-30-
12/07/05

 
CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES
SUPPLEMENTAL DATA TABLES
 
(Unaudited)
(In thousands)
 
Amounts of the Company’s total revenue attributable to services provided are as follows:
 
 	 	Three Months Ended
October 31,	 	Twelve Months Ended
April 30,	 	Six Months Ended October
31,	 	
 	 	2004	 	2005	 	2004	 	2005	 	2004	 	2005	 	
Collection	 	$	62,156	 	$	66,152	 	$	226,841	 	$	237,876	 	$	123,846	 	$	131,419	 	
Landfill / disposal facilities	 	22,091	 	26,498	 	69,639	 	80,132	 	42,525	 	49,761	 	
Transfer	 	11,520	 	11,913	 	38,830	 	41,862	 	23,116	 	23,562	 	
Recycling	 	30,614	 	32,232	 	99,361	 	122,094	 	60,566	 	64,053	 	
Total revenues	 	$	126,381	 	$	136,795	 	$	434,671	 	$	481,964	 	$	250,053	 	$	268,795	 	
 
Components of revenue growth for the three months ended October 31, 2005 compared to the three months ended October 31, 2004:
 
 	 	Percentage	 	Percentage	 	
Solid Waste Operations (1)	Price	 	1.9	%	5.3	%	
 	Volume	 	1.7	%	-0.4	%	
 	Solid waste commodity price and volume	 	0.0	%	0.0	%	
Total growth - Solid Waste Operations	 	3.6	%	4.9	%	
 	 	 	 	 	 	 	
FCR Operations (1) 	Price	 	-0.9	%	2.0	%	
 	Volume	 	4.2	%	3.3	%	
Total growth - Recycling Operations	 	3.3	%	5.3	%	
 	 	 	 	 	 	 	
Rollover effect of acquisitions (as a percentage of total revenue)	 	3.0	%	3.2	%	
 	 	 	 	 	 	 	
Divestitures (as a percentage of total revenue)	 	 	 	-0.3	%	
 	 	 	 	 	 	 	
Total revenue growth	 	 	6.4	%	8.2	%	

(1) - Calculated as a percentage of segment revenues.
 
Solid Waste Internalization Rates by Region:
 
 	 	Three Months Ended
October 31,	 	Twelve Months Ended
April 30,	 	Six Months Ended October
31,	 	
 	 	2004	 	2005	 	2004	 	2005	 	2004	 	2005	 	
North Eastern region	 	58.9	%	54.5	%	56.9	%	57.9	%	57.9	%	57.7	%	
South Eastern region	 	49.0	%	53.9	%	47.7	%	51.6	%	51.6	%	52.7	%	
Central region	 	79.8	%	79.2	%	79.5	%	80.0	%	80.0	%	78.7	%	
Western region	 	36.6	%	42.2	%	34.5	%	40.8	%	40.8	%	41.7	%	
Solid waste operations	 	55.0	%	57.7	%	53.2	%	56.8	%	56.8	%	57.3	%	
 
US GreenFiber (50% owned) Financial Statistics:
 
 	 	Three Months Ended
October 31,	 	Twelve Months Ended
April 30,	 	Six Months Ended October
31,	 	
 	 	2004	 	2005	 	2004	 	2005	 	2004	 	2005	 	
Revenue	 	$	35,638	 	$	42,934	 	$	116,057	 	$	136,409	 	$	68,873	 	$	74,538	 	
Net Income	 	1,988	 	3,026	 	4,523	 	5,767	 	1,854	 	2,886	 	
Cash flow from operations	 	3,273	 	5,456	 	3,944	 	15,101	 	6,269	 	9,965	 	
Net working capital changes	 	(94	)	686	 	(5,810	)	3,478	 	1,664	 	3,596	 	
EBITDA	 	$	3,367	 	$	4,770	 	$	9,754	 	$	11,623	 	$	4,605	 	$	6,369	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
As a percentage of revenue:	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income	 	5.6	%	7.0	%	3.9	%	4.2	%	2.7	%	3.9	%	
EBITDA	 	9.4	%	11.1	%	8.4	%	8.5	%	6.7	%	8.5	%	

 
Breakdown of Growth versus Maintenance Capital Expenditures (1):
 
 	 	Three Months
Ended October
31, 2005	 	Twelve Months Ended
April 30,	 	Six Months
Ended
October 31,
2005	 	
Growth Capital Expenditures:	 	 	 	116,057	 	136,409	 	 	 	
Landfill Development	 	$	10,342	 	4,523	 	5,767	 	$	18,601	 	
Pinetree Landfill	 	—	 	3,944	 	15,101	 	—	 	
Boston MRF Building	 	—	 	9,754	 	11,623	 	5,998	 	
Other	 	595	 	9,754	 	11,623	 	1,279	 	
Total Growth Capital Expenditures	 	10,937	 	 	 	 	 	25,878	 	
 	 	 	 	 	 	 	 	 	 	
Maintenance Capital Expenditures:	 	 	 	 	 	 	 	 	 	
Vehicles, Machinery / Equipment and Containers	 	7,769	 	 	 	 	 	21,495	 	
Landfill Construction	 	8,470	 	 	 	 	 	12,782	 	
Facilities	 	2,678	 	 	 	 	 	3,755	 	
Other	 	430	 	 	 	 	 	989	 	
Total Maintenance Capital Expenditures	 	19,347	 	 	 	 	 	39,021	 	
 	 	 	 	 	 	 	 	 	 	
Total Capital Expenditures	 	$	30,284	 	 	 	 	 	$	64,899	 	

(1) The Company’s capital expenditures are broadly defined as pertaining to either growth or maintenance activities.  Growth capital expenditures are defined as costs related to development of new airspace, permit expansions, new recycling contracts along with incremental costs of equipment and infrastructure added to further such activities.  Growth capital expenditures include the cost of equipment added directly as a result of new business as well as expenditures associated with increasing infrastructure to increase throughput at transfer stations and recycling facilities.  Growth capital expenditures also include those outlays associated with acquiring landfill operating leases, which do not meet the operating lease payment definition, but which were included as a commitment in the successful bid.  Maintenance capital expenditures are defined as landfill cell construction costs not related to expansion airspace, costs for normal permit renewals and replacement costs for equipment due to age or obsolescence.

 
CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
 
Unaudited
(In thousands, except amounts per share)
 
 	 	Three Months Ended	 	Three Months Ended	 	Six Months Ended	 	
 	 	January 31,
2004	 	 	 	October 31,
2004	 	October 31,
2005	 	October 31,
2004	 	October 31,
2005	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Revenues	 	$	104,558	 	100.0	%	$	126,381	 	$	136,795	 	$	250,053	 	$	268,795	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating expenses:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cost of operations	 	67,804	 	64.8	%	79,385	 	88,043	 	157,663	 	173,630	 	
General and administration	 	14,733	 	14.1	%	16,370	 	18,132	 	31,885	 	35,350	 	
Depreciation and amortization	 	 	 	 	 	17,575	 	16,914	 	34,798	 	33,047	 	
Deferred costs	 	14,614	 	14.0	%	295	 	—	 	295	 	—	 	
 	 	97,151	 	92.9	%	113,625	 	123,089	 	224,641	 	242,027	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating income	 	7,407	 	7.1	%	12,756	 	13,706	 	25,412	 	26,768	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Other expense/(income), net:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Interest expense, net	 	6,278	 	6.0	%	7,240	 	7,821	 	14,327	 	15,172	 	
Income from equity method investments	 	(1,171	)	-1.1	%	(994	)	(1,513	)	(927	)	(1,443	)	
Other (income)/expense	 	(343	)	-0.3	%	220	 	(133	)	751	 	(83	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	4,764	 	4.6	%	6,466	 	6,175	 	14,151	 	13,646	 	
Income from continuing operations before income taxes and discontinued operations	 	2,643	 	2.5	%	6,290	 	7,531	 	11,261	 	13,122	 	
Provision for income taxes	 	1,153	 	1.1	%	2,805	 	3,374	 	5,014	 	5,857	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income from continuing operations before discontinued operations	 	1,490	 	1.4	%	3,485	 	4,157	 	6,247	 	7,265	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Discontinued Operations:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income from discontinued operations, net of income taxes	 	 	 	 	 	59	 	—	 	140	 	—	 	
Loss on disposal of discontinued operations, net of income taxes	 	 	 	 	 	(150	)	—	 	(150	)	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income	 	 	 	 	 	3,394	 	4,157	 	6,237	 	7,265	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Preferred stock dividend	 	818	 	0.8	%	832	 	854	 	1,670	 	1,704	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income available to common stockholders	 	 	 	 	 	$	2,562	 	$	3,303	 	$	4,567	 	$	5,561	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Common stock and common stock equivalent shares outstanding, assuming full dilution	 	24,795	 	 	 	25,003	 	25,358	 	25,040	 	25,277	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income per common share before discontinued operations	 	$	0.03	 	 	 	$	0.11	 	$	0.13	 	$	0.18	 	$	0.22	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income per common share	 	 	 	 	 	$	0.10	 	$	0.13	 	$	0.18	 	$	0.22	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
EBITDA (1)	 	$	22,021	 	21.1	%	$	30,626	 	$	30,620	 	$	60,505	 	$	59,815	 	

 
CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
Unaudited
(In thousands)
 
 	 	April 30,
2005	 	October 31,
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	 	51,726	 	57,832	 	
Other current assets	 	9,009	 	11,264	 	
 	 	 	 	 	 	
Total current assets	 	69,383	 	76,746	 	
 	 	 	 	 	 	
Property, plant and equipment, net of accumulated depreciation	 	412,753	 	453,628	 	
Goodwill	 	157,492	 	169,610	 	
Intangible assets, net	 	2,711	 	3,308	 	
Restricted cash	 	12,124	 	12,253	 	
Investments in unconsolidated entities	 	37,699	 	37,691	 	
Other non-current assets	 	20,292	 	16,570	 	
 	 	 	 	 	 	
 	 	$	712,454	 	$	769,806	 	
 	 	 	 	 	 	
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	 	
Other accrued liabilities	 	45,734	 	42,267	 	
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	 	
Other long-term liabilities	 	33,043	 	39,425	 	
 	 	 	 	 	 	
Series A redeemable, convertible preferred stock	 	67,964	 	68,702	 	
 	 	 	 	 	 	
Stockholders’ equity	 	138,782	 	146,165	 	
 	 	 	 	 	 	
 	 	$	712,454	 	$	769,806	 	

 
CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited
(In thousands)
 
 	 	Six Months Ended	 	
 	 	October 31,
2004	 	October 31,
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	 	(11,109	)	(9,273	)	
 	 	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	 	—	 	
Other	 	1,546	 	1,191	 	
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	 	

 
CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES
Unaudited
(In thousands)
 
Note 1:   In the fourth quarter of fiscal 2003, we entered into negotiations with former employees for the transfer of our commercial recycling and domestic brokerage businesses. The commercial recycling business had been accounted for as a discontinued operation since fiscal 2001.  Due to the nature of the transfer transaction, we could not retain historical discontinued accounting treatment for this operation. Therefore the commercial recycling business’ operating results have been reclassified from discontinued to continuing operations for the three and twelve months ended April 30, 2003. Also in connection with the discontinued accounting treatment recorded in fiscal 2001, estimated future losses from this operation were classified as losses from discontinued operations. This amount has been reclassified and offset against actual losses from operations for the three and twelve months ended April 30, 2003.
 
Note 1:   The company divested the assets of Data Destruction Services, Inc. (Data Destruction) during the quarter ended October 31, 2004.  The transaction required discontinued operations treatment under SFAS No. 144, therefore the operating results of Data Destruction have been reclassified from continuing to discontinued operations for the quarter and six months ended October 31, 2004.
 
Note 1:   Non - GAAP Financial Measures
 
In addition to disclosing financial results prepared in accordance with Generally Accepted Accounting Principles (GAAP), we also disclose EBITDA (earnings before interest, taxes, depreciation and amortization, deferred costs and impairment charge) and Free Cash Flow, which are non-GAAP measures.
 
These measures are provided because we understand that certain investors use this information when analyzing the financial position of the solid waste industry, including us. Historically, these measures have been key in comparing operating efficiency of publicly traded companies within the industry, and assist investors in measuring our ability to meet capital expenditure and working capital requirements. For these reasons, we utilize these non-GAAP metrics to measure our performance at all levels. These measures do not represent, and should not be considered as alternatives to cash provided by operating activities as determined in accordance with GAAP.  Moreover, these measures do not necessarily indicate whether cash flow will be sufficient for such items as working capital or capital expenditures, or to react to changes in our industry or to the economy generally. Because these measures are not calculated by all companies in the same fashion, they may not be comparable to similarly titled measures reported by other companies.
 
Following is a reconciliation of EBITDA to Cash Provided by Operating Activities:
 
 	 	Three Months Ended	 	Six Months Ended	 	
 	 	October 31,
2004	 	October 31,
2005	 	October 31,
2004	 	October 31,
2005	 	
 	 	 	 	 	 	 	 	 	 	
Cash Provided by Operating Activities	 	$	16,133	 	$	13,983	 	$	35,846	 	$	36,604	 	
 	 	 	 	 	 	 	 	 	 	
Changes in assets and liabilities, net of effects of acquisitions and divestitures	 	7,310	 	9,335	 	11,109	 	9,273	 	
Deferred income taxes	 	(1,946	)	(2,272	)	(3,701	)	(3,993	)	
Income from discontinued operations	 	(59	)	—	 	(140	)	—	 	
Provision for income taxes	 	2,805	 	3,374	 	5,014	 	5,857	 	
Interest expense, net	 	7,240	 	7,821	 	14,327	 	15,172	 	
Depletion of landfill operating lease obligations	 	(1,241	)	(1,545	)	(2,588	)	(2,974	)	
Other (expense) income, net	 	384	 	(76	)	638	 	(124	)	
EBITDA	 	$	30,626	 	$	30,620	 	$	60,505	 	$	59,815	 	
 
Following is a reconciliation of Free Cash Flow to Cash Provided by Operating Activities:
 
 	 	Three Months
Ended October
31, 2005	 	Six Months
Ended October
31, 2005	 	
 	 	 	 	 	 	
EBITDA	 	$	30,620	 	$	59,815	 	
Add (deduct):	Cash interest	 	(12,546	)	(12,823	)	
 	Capital expenditures	 	(30,284	)	(64,899	)	
 	Cash taxes	 	(531	)	(1,059	)	
 	Depletion of landfill operating lease obligations	 	1,545	 	2,974	 	
 	Change in working capital, adjusted for non-cash items	 	(4,098	)	(10,894	)	
 	 	 	 	 	 	
FREE CASH FLOW	 	(15,294	)	(26,886	)	
 	 	 	 	 	 	
Add (deduct):	Capital expenditures	 	30,284	 	64,899	 	
 	Other	 	(1,007	)	(1,409	)	
Cash Provided by Operating Activities	 	$	13,983	 	$	36,604