Casella Waste Systems Inc. Reports Operating Results (10-Q)
Casella Waste Systems Inc. has a market cap of $116.4 million; its shares were traded at around $4.45 with and P/S ratio of 0.3. Casella Waste Systems Inc. had an annual average earning growth of 8% over the past 5 years.CWST is in the portfolios of Mario Gabelli of GAMCO Investors, Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations: As of November 30, 2010, we owned and/or operated 31 solid waste collection operations, 30 transfer stations, 34 recycling facilities, eight Subtitle D landfills, one landfill permitted to accept construction and demolition materials, and one waste-to-energy facility. In addition, we hold a 50% interest in US Green Fiber, LLC (GreenFiber), a joint venture that manufactures, markets and sells cellulose insulation made from recycled fiber. We also hold a 10.6% interest in RecycleRewards, Inc. (RecycleRewards), a company that markets an incentive based recycling service, and a 19.9% interest in Evergreen National Indemnity Company (Evergreen), a surety company which provides surety bonds to secure contractual performance for municipal solid waste collection contracts and landfill closure and post-closure obligations.
For the three months ended October 31, 2010, we reported revenues of $141.0 million, an increase of $7.9 million, or 5.9%, from $133.1 million for the three months ended October 31, 2009. As a percentage of solid waste revenues, solid waste revenues increased 2.9%, with higher disposal, power generation and
processing and recycling volumes accounting for 10.1% of the increase, 1.0% from higher commodity price and volumes, 0.1% increase from increased fuel surcharges along with a 0.5% increase from an acquisition in the Eastern region. These increases were partially offset by a 1.4% volume decline in collection, 1.3% price decline in power generation, 2.0% decline related to a divestiture in the Eastern region, and a 4.1% decline from the closure of a landfill. As a percentage of major accounts revenues, major accounts revenues increased 4.6% with volume representing 4.2% of the increase and 0.4% resulting from higher price. As a percentage of total FCR recycling revenues, FCR revenues increased 20.4%, with 14.6% coming from higher commodity prices and 5.8% from higher volumes.
Operating income for the three months ended October 31, 2010 was $13.8 million compared to $13.7 million in the prior year comparable period and decreased between years as a percentage of revenue to 9.8% from 10.3%. Western region operating income increased $2.9 million compared to the prior year period primarily due to higher disposal revenues associated with higher volume. Eastern region operating income decreased $1.4 million compared to the prior year period primarily due to lower power revenue at Maine Energy associated with lower market rates for power. FCR recycling operating income decreased by $0.9 million compared to the prior year period due primarily to higher labor and maintenance costs.
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