Casella Waste Systems (CWST) Q4 2004 earnings summary

Executive summary

• FY2004 revenue rose 4.5% to $439.7M, while operating income declined to $32.8M; net income was $8.1M and diluted EPS was $0.20.

• Disposal capacity doubled over the prior 12–18 months, supporting a strategy centered on municipal partnerships, core-market assets, and greater waste-stream integration.

Financial highlights

• Revenue increased $18.8M YoY to $439.7M, driven by $15.7M growth in core solid waste and a $12.3M increase in recycling; divestitures reduced revenue by $32.6M.

• Cost of operations rose 3.2% to $287.3M; general and administration increased 4.3% to $58.2M, while depreciation and amortization climbed 24.6% to $59.7M.

• Net interest expense fell 3.4% to $25.4M; reported other expense included an $8.0M write-down of tire-recycling and power-plant investments.

• Operating cash flow was $69.9M; investing cash outflow was $123.7M and financing cash inflow was $46.1M.

Outlook and guidance

• FY2005 capital spending was expected at $68M–$72M, primarily for newly acquired landfill operations.

• Strategy prioritizes core-market asset growth, municipal partnerships, stronger franchise concentration, and use of the existing waste-services infrastructure to pursue growth.

• Expansion plans included seeking ~5.1M tons of additional Waste USA capacity, with permitting expected in FY2005; Ontario County had 3.9M tons expected to be approved in FY2005.