Company Quick10K Filing
Casella Waste Systems
Price43.21 EPS0
Shares48 P/E235
MCap2,090 P/FCF29
Net Debt523 EBIT26
TEV2,612 TEV/EBIT100
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-03-31 Filed 2020-05-08
10-K 2019-12-31 Filed 2020-02-21
10-Q 2019-09-30 Filed 2019-11-01
10-Q 2019-06-30 Filed 2019-08-02
10-Q 2019-03-31 Filed 2019-05-01
10-K 2018-12-31 Filed 2019-02-22
10-Q 2018-09-30 Filed 2018-11-02
10-Q 2018-06-30 Filed 2018-08-03
10-Q 2018-03-31 Filed 2018-05-04
10-K 2017-12-31 Filed 2018-03-02
10-Q 2017-09-30 Filed 2017-11-02
10-Q 2017-06-30 Filed 2017-08-03
10-Q 2017-03-31 Filed 2017-05-05
10-K 2016-12-31 Filed 2017-03-02
10-Q 2016-09-30 Filed 2016-11-04
10-Q 2016-06-30 Filed 2016-07-29
10-Q 2016-03-31 Filed 2016-05-05
10-K 2015-12-31 Filed 2016-03-02
10-Q 2015-09-30 Filed 2015-10-23
10-Q 2015-06-30 Filed 2015-07-30
10-Q 2015-03-31 Filed 2015-05-07
10-Q 2014-10-31 Filed 2014-12-05
10-Q 2014-07-31 Filed 2014-08-28
10-K 2014-04-30 Filed 2014-06-27
10-Q 2014-01-31 Filed 2014-03-06
10-Q 2013-10-31 Filed 2013-12-06
10-Q 2013-07-31 Filed 2013-08-29
10-K 2013-04-30 Filed 2013-06-27
10-Q 2013-01-31 Filed 2013-03-05
10-Q 2012-10-31 Filed 2012-12-04
10-Q 2012-07-31 Filed 2012-08-30
10-K 2012-04-30 Filed 2012-06-28
10-Q 2012-01-31 Filed 2012-03-02
10-Q 2011-10-31 Filed 2011-12-01
10-Q 2011-07-31 Filed 2011-08-31
10-K 2011-04-30 Filed 2011-06-20
10-Q 2011-01-31 Filed 2011-03-03
10-Q 2010-10-31 Filed 2010-12-02
10-Q 2010-07-31 Filed 2010-09-03
10-K 2010-04-30 Filed 2010-06-11
10-Q 2010-01-31 Filed 2010-03-05
8-K 2020-07-20 Enter Agreement, Off-BS Arrangement, Exhibits
8-K 2020-06-02
8-K 2020-05-07
8-K 2020-04-01
8-K 2020-02-25
8-K 2020-02-20
8-K 2019-12-17
8-K 2019-12-02
8-K 2019-11-21
8-K 2019-11-06
8-K 2019-10-31
8-K 2019-10-01
8-K 2019-09-25
8-K 2019-09-11
8-K 2019-08-01
8-K 2019-06-06
8-K 2019-04-30
8-K 2019-02-21
8-K 2019-01-22
8-K 2019-01-22
8-K 2018-11-01
8-K 2018-09-06
8-K 2018-08-02
8-K 2018-06-06
8-K 2018-05-15
8-K 2018-05-03
8-K 2018-04-03
8-K 2018-03-27
8-K 2018-03-14
8-K 2018-03-14
8-K 2018-03-01

CWST 10Q Quarterly Report

Part I.
Item 1. Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II.
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 6. Exhibits
EX-31.1 cwst-ex311033120.htm
EX-31.2 cwst-ex312033120.htm
EX-32.1 cwst-ex321033120.htm
EX-32.2 cwst-ex322033120.htm

Casella Waste Systems Earnings 2020-03-31

Balance SheetIncome StatementCash Flow
1.00.80.60.30.1-0.12012201420172020
Assets, Equity
0.50.30.20.0-0.1-0.32012201420172020
Rev, G Profit, Net Income
0.10.10.0-0.0-0.1-0.12012201420172020
Ops, Inv, Fin

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2020
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     
Commission file number 000-23211
CASELLA WASTE SYSTEMS, INC.
(Exact name of registrant as specified in its charter)

Delaware03-0338873
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)

25 Greens Hill Lane,
Rutland,Vermont05701
(Address of principal executive offices)(Zip Code)
Registrant’s telephone number, including area code: (802775-0325
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading
Symbol(s)
Name of each exchange
on which registered
Class A common stock, $0.01 par value per shareCWSTThe Nasdaq Stock Market LLC
(Nasdaq Global Select Market)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company," and "emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer

Non-accelerated filerSmaller reporting company

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.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  No  
The number of shares outstanding of each of the registrant’s classes of common stock, as of April 30, 2020:
Class A common stock, $0.01 par value per share:47,321,483  
Class B common stock, $0.01 par value per share:988,200  





PART I.
ITEM 1. FINANCIAL STATEMENTS
CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands)
March 31,
2020
December 31,
2019
 (Unaudited) 
ASSETS
CURRENT ASSETS:
Cash and cash equivalents$26,221  $3,471  
Accounts receivable, net of allowance for credit losses of $2,092 and $1,468, respectively
73,509  80,205  
Refundable income taxes2,193  1,251  
Prepaid expenses8,728  8,994  
Inventory7,815  7,679  
Other current assets1,088  1,213  
Total current assets119,554  102,813  
Property, plant and equipment, net of accumulated depreciation and amortization of $862,783 and $844,874, respectively
454,800  443,825  
Operating lease right-of-use assets107,133  108,025  
Goodwill186,626  185,819  
Intangible assets, net57,943  58,721  
Restricted assets1,410  1,586  
Cost method investments11,264  11,264  
Deferred income taxes7,259  8,577  
Other non-current assets11,651  11,552  
Total assets$957,640  $932,182  
The accompanying notes are an integral part of these consolidated financial statements.
1


CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Continued)
(in thousands, except for share and per share data)
March 31,
2020
December 31,
2019
(Unaudited) 
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of debt$5,392  $4,301  
Current operating lease liabilities8,829  9,356  
Accounts payable53,822  64,396  
Accrued payroll and related expenses5,288  14,375  
Accrued interest2,094  2,041  
Contract liabilities2,860  2,299  
Current accrued capping, closure and post-closure costs9,689  10,223  
Other accrued liabilities27,179  23,598  
Total current liabilities115,153  130,589  
Debt, less current portion547,729  509,021  
Operating lease liabilities, less current portion71,729  70,709  
Accrued capping, closure and post-closure costs, less current portion63,661  61,704  
Deferred income taxes2,180  2,643  
Other long-term liabilities39,192  34,763  
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Casella Waste Systems, Inc. stockholders' equity
Class A common stock, 0.01 par value per share; 100,000,000 shares authorized; 47,320,000 and 46,803,000 shares issued and outstanding, respectively
473  468  
Class B common stock, 0.01 par value per share; 1,000,000 shares authorized; 988,000 shares issued and outstanding, respectively; 10 votes per share
10  10  
Additional paid-in capital486,989  485,332  
Accumulated deficit(356,246) (357,016) 
Accumulated other comprehensive loss(13,230) (6,041) 
Total stockholders' equity117,996  122,753  
Total liabilities and stockholders' equity$957,640  $932,182  
The accompanying notes are an integral part of these consolidated financial statements.
2


CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except for per share data)
 Three Months Ended
March 31,
 20202019
Revenues$182,910  $163,664  
Operating expenses:
Cost of operations128,518  117,759  
General and administration24,352  22,742  
Depreciation and amortization21,406  17,489  
Expense from acquisition activities and other items1,009  677  
Southbridge landfill closure charge613  555  
175,898  159,222  
Operating income7,012  4,442  
Other expense (income):
Interest income(51) (117) 
Interest expense5,952  6,460  
Other expense (income), net 43  (216) 
Other expense, net5,944  6,127  
Income (loss) before income taxes 1,068  (1,685) 
Provision for income taxes  109  29  
Net income (loss) $959  $(1,714) 
Basic earnings per share attributable to common stockholders:
Weighted average common shares outstanding48,005  45,913  
Basic earnings per common share$0.02  $(0.04) 
Diluted earnings per share attributable to common stockholders:
Weighted average common shares outstanding48,262  45,913  
Diluted earnings per common share$0.02  $(0.04) 
The accompanying notes are an integral part of these consolidated financial statements.
3


CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
COMPREHENSIVE LOSS
(Unaudited)
(in thousands)
 Three Months Ended
March 31,
 20202019
Net income (loss)$959  $(1,714) 
Other comprehensive loss, before tax:
Hedging activity:
Interest rate swap settlements(411) (28) 
Interest rate swap amounts reclassified into interest expense489  25  
Unrealized loss resulting from changes in fair value of derivative instruments(7,379) (1,554) 
Other comprehensive loss, before tax(7,301) (1,557) 
Income tax benefit related to items of other comprehensive loss(112)   
Other comprehensive loss, net of tax(7,189) (1,557) 
Comprehensive loss$(6,230) $(3,271) 
The accompanying notes are an integral part of these consolidated financial statements.
4



CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
STOCKHOLDERS' EQUITY (DEFICIT)
(Unaudited)
(in thousands)


Class A
Common Stock
Class B
Common Stock
Additional Paid-In CapitalAccumulated DeficitAccumulated Other
Comprehensive Loss
TotalSharesAmountSharesAmount
Balance, December 31, 2019$122,753  46,803  $468  988  $10  $485,332  $(357,016) $(6,041) 
Cumulative effect of new accounting principle(189) —  —  —  —  —  (189) —  
Issuances of Class A common stock100  517  5  —  —  95  —  —  
Stock-based compensation1,562  —  —  —  —  1,562  —  —  
Comprehensive loss:
Net income959  —  —  —  —  —  959  —  
Other comprehensive loss:
Hedging activity(7,189) —  —  —  —  —  —  (7,189) 
Balance, March 31, 2020$117,996  47,320  $473  988  $10  $486,989  $(356,246) $(13,230) 


Class A
Common Stock
Class B
Common Stock
Additional Paid-In CapitalAccumulated DeficitAccumulated Other
Comprehensive Loss
TotalSharesAmountSharesAmount
Balance, December 31, 2018$(15,832) 41,944  $419  988  $10  $373,716  $(388,669) $(1,308) 
Issuance of Class A common stock - equity offering100,446  3,565  36  —  —  100,410  —  —  
Issuance of Class A common stock - acquisition  67  1  —  —  (1) —  —  
Issuances of Class A common stock260  676  7  —  —  253  —  —  
Stock-based compensation1,431  —  —  —  —  1,431  —  —  
Comprehensive loss:
Net loss(1,714) —  —  —  —  —  (1,714) —  
Other comprehensive loss:
Hedging activity(1,557) —  —  —  —  —  —  (1,557) 
Balance, March 31, 2019$83,034  46,252  $463  988  $10  $475,809  $(390,383) $(2,865) 
The accompanying notes are an integral part of these consolidated financial statements.
5


CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
 Three Months Ended
March 31,
 20202019
Cash Flows from Operating Activities:
Net income (loss)$959  $(1,714) 
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization21,406  17,489  
Depletion of landfill operating lease obligations1,673  1,648  
Interest accretion on landfill and environmental remediation liabilities1,794  1,804  
Amortization of debt issuance costs527  575  
Stock-based compensation1,562  1,431  
Operating lease right-of-use assets expense2,417  2,579  
Loss (gain) on sale of property and equipment137  (57) 
Southbridge Landfill non-cash closure charge51    
Non-cash expense from acquisition activities and other items532  14  
Deferred income taxes967  188  
Changes in assets and liabilities, net of effects of acquisitions and divestitures:
Accounts receivable6,507  2,694  
Landfill operating lease contract expenditures(50) (50) 
Accounts payable(10,588) (7,904) 
Prepaid expenses, inventories and other assets(171) (3,430) 
Accrued expenses, contract liabilities and other liabilities(12,932) (10,490) 
Net cash provided by operating activities14,791  4,777  
Cash Flows from Investing Activities:
Acquisitions, net of cash acquired(5,144) (1,222) 
Additions to property, plant and equipment(19,851) (18,243) 
Proceeds from sale of property and equipment51  57  
Net cash used in investing activities(24,944) (19,408) 
Cash Flows from Financing Activities:
Proceeds from debt borrowings73,500  10,600  
Principal payments on debt(40,686) (80,746) 
Payments of debt issuance costs(11)   
Proceeds from the exercise of share based awards100  260  
Proceeds from the public issuance of Class A Common Stock  100,446  
Net cash provided by financing activities32,903  30,560  
Net increase in cash and cash equivalents22,750  15,929  
Cash and cash equivalents, beginning of period3,471  4,007  
Cash and cash equivalents, end of period$26,221  $19,936  
Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for:
Interest$5,372  $5,718  
Income taxes, net of refunds$84  $51  
Supplemental Disclosure of Non-Cash Investing and Financing Activities:
Non-current assets obtained through long-term obligations$6,469  $2,473  
The accompanying notes are an integral part of these consolidated financial statements.
6


CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(in thousands, except for per share data)
1. BASIS OF PRESENTATION
Casella Waste Systems, Inc. (“Parent”), and its consolidated subsidiaries (collectively, “we”, “us” or “our”), is a regional, vertically integrated solid waste services company that provides collection, transfer, disposal, landfill, landfill gas-to-energy, recycling and organics services in the northeastern United States. We market recyclable metals, aluminum, plastics, paper, and corrugated cardboard, which have been processed at our recycling facilities, as well as recyclables purchased from third-parties. Effective January 1, 2020, we reorganized our operations to consist of a single resource-renewal focused operation by combining our larger-scale recycling and commodity brokerage operations along with our organics services and major account and industrial services into our Resource Solutions segment. We continue to manage our solid waste operations on a geographic basis through two regional operating segments, the Eastern and Western regions, each of which provides a full range of solid waste services. Legal, tax, information technology, human resources, certain finance and accounting and other administrative functions are included in our Corporate Entities segment. Segment information reported in the three months ended March 31, 2019 and as of December 31, 2019 has been reclassified to conform with the three months ended March 31, 2020 and as of March 31, 2020 presentation.
The accompanying unaudited consolidated financial statements, which include the accounts of the Parent and our wholly-owned subsidiaries, have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). All significant intercompany accounts and transactions are eliminated in consolidation. Investments in entities in which we do not have a controlling financial interest are accounted for under either the equity method or the cost method of accounting, as appropriate. Our significant accounting policies are more fully discussed in Item 8 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, which was filed with the SEC on February 21, 2020.
Preparation of our consolidated financial statements in accordance with GAAP requires management to make certain estimates and assumptions. These estimates and assumptions affect the accounting for and recognition and disclosure of assets, liabilities, equity, revenues and expenses. We must make these estimates and assumptions because certain information that we use is dependent on future events, cannot be calculated with a high degree of precision given the available data, or simply cannot be readily calculated. In the opinion of management, these consolidated financial statements include all adjustments, which include normal recurring and nonrecurring adjustments, necessary for a fair presentation of the financial position, results of operations and cash flows for the periods presented. The results for the three months ended March 31, 2020 may not be indicative of the results for any other interim period or the entire fiscal year. The consolidated financial statements presented herein should be read in conjunction with our audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019.
Recent Events
With the global outbreak of the novel coronavirus ("COVID-19") and the declaration of a pandemic by the World Health Organization in March 2020, the U.S. Government and all of the states in which we operate have declared the waste services industry as an essential services provider and as a result we are committed to continue to operate and provide our full breadth of services. We have prioritized the safety and well-being of our employees by strictly adhering to recommendations of the Centers for Disease Control and Prevention as well as executive orders of the states in which we operate.
The COVID-19 outbreak has caused, and is likely to continue to cause, significant economic disruption across our geographic footprint and has adversely affected, and is expected to continue to adversely affect, our business. COVID-19 negatively impacted our revenues at the end of the quarter ended March 31, 2020 as many collection customers required service level changes and volumes into our landfills declined. We have experienced an increase in certain costs associated with the protection of our employees including costs for additional safety equipment, hygiene products and enhanced facility cleaning. These costs are expected to continue throughout the remainder of the year. We have also taken immediate measures to reduce costs in other areas and preserve liquidity during this period of uncertainty. As of the date of this filing, we are unable to determine or predict the nature, duration or scope of the overall impact that COVID-19 will have on our business, results of operations, liquidity and capital resources.
Subsequent Events
We have evaluated subsequent events or transactions that have occurred after the consolidated balance sheet date of March 31, 2020 through the date of filing of the consolidated financial statements with the SEC on this Quarterly Report on Form 10-Q. We have determined that there are no subsequent events that require disclosure in this Quarterly Report on Form 10-Q.
7


2. ACCOUNTING CHANGES
A table providing a brief description of recent Accounting Standards Updates ("ASUs") to the Accounting Standards Codification (“ASC”) issued by the Financial Accounting Standards Board (“FASB”) that we adopted and deemed to have a material impact on our consolidated financial statements based on current account balances and activity follows:
StandardDescriptionEffect on the Financial Statements or Other
Significant Matters
Accounting standards adopted effective January 1, 2020
ASU No. 2016-13, as amended through March 2020: Financial Instrument Credit Losses (Topic 326)Requires that an entity measures all of its expected credit losses for financial assets held based on historical experience, current conditions, and reasonable and supportable forecasts.
We adopted this guidance effective January 1, 2020 using the required modified-retrospective approach. We recognized a cumulative effect adjustment of $(189) to retained earnings upon implementation. This guidance replaces the incurred loss methodology with an expected loss methodology that is referred to as current expected credit loss ("CECL") methodology. CECL requires consideration of past events, current conditions, and reasonable and supportable forecasts about the future to assess credit loss estimates and will generally result in the earlier recognition of an allowance for credit losses. We have updated our business processes and systems and controls to support recognition and disclosure under the new guidance. See Note 5, Accounts Receivable, Net of Allowance for Credit Losses for additional disclosure.

A table providing a brief description of recent ASUs to the ASC issued by the FASB that are pending adoption and deemed to have a possible material impact on our consolidated financial statements based on current account balances and activity follows:
StandardDescriptionEffect on the Financial Statements or Other
Significant Matters
Accounting standards issued pending adoption
ASU No. 2020-04: Reference Rate Reform (Topic 848)Provides temporary optional guidance to ease the potential burden in applying GAAP to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued.We are currently assessing the provisions of this guidance and do not expect that its adoption will have an impact on our consolidated financial statements and related disclosures. This guidance will be in effect from March 12, 2020 through December 31, 2022.
ASU No. 2019-12: Income Taxes (Topic 740)Reduces the complexity over accounting for income taxes by removing certain exceptions and amending guidance to improve consistent application of accounting over income taxes.We are currently assessing the provisions of this guidance to determine whether or not its adoption will have an impact on our consolidated financial statements and related disclosures. This guidance is effective January 1, 2021 with early adoption permitted.

8


3. REVENUE RECOGNITION
A table of revenues disaggregated by service line and timing of revenue recognition by operating segment for each of the three months ended March 31, 2020 and 2019 follows:
Three Months Ended March 31, 2020
EasternWesternResource SolutionsTotal Revenues
Collection$36,829  $58,639  $  $95,468  
Landfill3,544  16,310    19,854  
Transfer9,383  6,706    16,089  
Customer solutions    21,663  21,663  
Recycling2  239  10,966  11,207  
Organics    14,932  14,932  
Transportation  2,671    2,671  
Landfill gas-to-energy385  641    1,026  
Total revenues$50,143  $85,206  $47,561  $182,910  
Transferred at a point-in-time$56  $235  $4,462  $4,753  
Transferred over time50,087  84,971  43,099  178,157  
Total revenues$50,143  $85,206  $47,561  $182,910  

Three Months Ended March 31, 2019
EasternWesternResource SolutionsTotal Revenues
Collection$33,965  $49,597  $  $83,562  
Landfill3,717  15,468    19,185