Casella Forecasts Slight Decline in Quarterly Figures

Casella Waste Systems, Inc. expects that, for the fiscal quarter ended January 31, 2000, revenues will be approximately $92 million, and earnings before interest, taxes, depreciation and amortization will be approximately $19.5 million. "Our change in expectations is not a reflection of the consistent operational performance of our core strategic assets," John Casella, president and CEO of Casella Waste Systems, said. "Our expectations are based on several factors."

Among those factors, according to Casella: The company’s new $450 million credit facility, which helps to ensure that the company will have the necessary capital to execute acquisition opportunities, includes higher than projected interest costs, and the company is expecting that its costs under the credit facility will be further increased as a result of a higher interest rate environment; the company’s Martinsville, Va. biomass generating facility, acquired as part of the merger with KTI in December 1999, was recently closed due to the bankruptcy of the facility’s only customer; a portion of KTI’s deferred revenue was incorrectly included in the company’s forecasting models for periods following the KTI acquisition, rather than being eliminated to reflect the change in accounting of the KTI acquisition from a pooling-of-interests to a purchase transaction.

As part of the company’s ongoing evaluation, begun in connection with the KTI acquisition, of identifying non-strategic assets for divestiture, the company earmarked assets and businesses representing about $50 million in annual revenue to be sold or otherwise taken off the company’s balance sheet; the capital from these divestitures is expected to be reinvested in the company’s core business or used to pay down company debt.

The company also announced that it completed the purchase of a number of Allied Waste Industries’ assets in eastern Massachusetts, as well as the acquisition of two other solid waste management companies in that market this month. "We continue to build a strong, integrated market presence in eastern Massachusetts and surrounding markets," Casella said.

The assets purchased from Allied Waste Industries include a collection operation in Peabody, Mass; a transfer station and recycling facility in Auburn, Mass.; and a collection operation and transfer station in Holliston, Mass.