Casella Waste Systems Inc. Reports Operating Results (10-Q)
Casella Waste Systems Inc. has a market cap of $183.9 million; its shares were traded at around $7.01 with and P/S ratio of 0.4. Casella Waste Systems Inc. had an annual average earning growth of 8% over the past 5 years.Hedge Fund Gurus that owns CWST: Jim Simons of Renaissance Technologies LLC, Steven Cohen of SAC Capital Advisors. Mutual Fund and Other Gurus that owns CWST: Mario Gabelli of GAMCO Investors.
Highlight of Business Operations: On February 7, 2011, we completed the offering of $200.0 million of 7.75% senior subordinated notes due 2019 (the 2019 Notes). The 2019 Notes are fully and unconditionally guaranteed on a senior subordinated basis by substantially all of our existing and future domestic restricted subsidiaries that guarantee our Senior Secured Credit Facility and Second Lien Notes. Interest is payable semi-annually in arrears on February 15 and August 15 of each year, commencing on August 15, 2011. We used the net proceeds from the offering of the 2019 Notes, together with other available funds, to refinance our 9.75% senior subordinated notes due February 2013 (the Senior Subordinated Notes) and to pay related transaction costs.
Upon completion of the FCR Divestiture, we owned and/or operated 31 solid waste collection operations, 29 transfer stations, 17 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 quarter ended January 31, 2011, we reported revenues of $111.6 million, an increase of $1.7 million, or 1.5%, from $109.9 million for the quarter ended January 31, 2010. Solid waste revenues decreased 0.2%, with decreases in collection volumes accounting for 1.3%, and further resulting from 0.3% price decline in power generation, 0.1% from commodity price decrease, 1.9% related to a divestiture in the Eastern region, and 1.4% from the closure of a landfill. These decreases were partially offset by an increase of 3.6% in disposal, power generation, processing and recycling volumes, 0.5% of the increase resulting from positive collection and disposal prices, 0.1% from fuel surcharges, 0.3% from higher commodity volumes, along with a 0.3% increase from an acquisition in the Eastern region. As a percentage of total Recycling revenues, revenues increased 19.9%, with 27.9% resulting from higher commodity prices offset by a 8.0% decline in volumes during the quarter.
Operating income for the three months ended January 31, 2011 was $6.3 million compared to $7.4 million in the prior year comparable period and decreased year over year as a percentage of revenue to 5.6% from 6.7%. Eastern region operating income decreased $1.9 million compared to the prior year comparable period primarily due to lower power revenue at Maine Energy associated with lower market rates for power. Central region operating income decreased by $0.7 million compared to the prior year comparable period primarily due to increased labor, fuel, maintenance, and hauling costs that more than offset increased revenues. Recycling operating income increased by $1.0 million compared to the prior year comparable period due primarily to increased commodity pricing.
to 8.8% from 7.3%. Eastern region operating income increased $1.7 million compared to the prior year period primarily due to decreased amortization related to a volume shift within the region. Central region operating income decreased by $2.0 million compared to the prior year period primarily due to increased labor, fuel, maintenance, and hauling costs. Western region operating income increased $4.9 million compared to the prior year period primarily due to higher disposal revenues associated with higher volume. Recycling operating income increased by $1.5 million compared to the prior year period due primarily to increased commodity pricing.
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