Casella Waste Systems, Inc. · NASDAQ:CWST
Casella Waste Systems — Merger or Acquisition (January 2011)
20 slides from Casella Waste Systems's merger presentation, Jan 24, 2011
Slide 1: Divestiture of Non-Integrated Recycling Assets
Divestiture of Non-Integrated Recycling Assets Casella Waste Systems January 24, 2011 John W. Casella Chairman & CEO Edwin D. Johnson CFO & SVP
Slide 2: Safe Harbor Statement
2 Such risks and uncertainties include or relate to, among other things: the divestiture of the assets may not be successfully completed due to adverse economic conditions, the inability of the buyer to obtain its financing, the inability of the Company to obtain necessary approvals, or other factor
Slide 3: Transaction Summary – Divestiture of Non-Integrated Assets
3 Transaction Summary – Divestiture of Non-Integrated Assets 1 Defined as consolidated total funded debt to bank-defined cash flow metric, as calculated per the Senior Secured Credit Agreement. 2 Divestiture excludes FCR recycling assets located inside Company’s core operating region. (NY, MA, VT, N
Slide 4: Transaction Highlights and Rationale
4 Transaction Highlights and Rationale Divestiture strengthens Casella’s balance sheet and credit profile. 100% of net divestiture proceeds used to pay down debt. Total debt reduced by $117.4 million. Pro forma leverage of 4.0x, down 0.4x from 4.4x.1 Implementation of deleveraging strategy well ahea
Slide 5: Transaction Highlights and Rationale (Cont'd)
5 Transaction Highlights and Rationale (Cont’d) Transaction simplifies business model and improves risk profile. Sale of non-integrated recycling operations simplifies business structure. Risk profile is improved with lower exposure to recycling commodities. Same vision for the future, but with a st
Slide 6: Casella Locations Post Divestiture
31 COLLECTION OPERATIONS 29 TRANSFER STATIONS DISPOSAL FACILITIES 10 RECYCLING FACILITIES 17 Integrated Solid Waste Operations1 Non-Integrated Recycling Operations (facilities being sold) LANDFILL GAS-TO-ENERGY FACILITIES 5 1 Integrated solid waste operations include collection, transfer, disposal,
Slide 7: Casella Retains Strong Resource Solution Platform after Sale
7 Casella Retains Strong Resource Solution Platform after Sale Meeting existing & emerging customer needs through resource solutions. Collection, transfer, disposal assets Integrated assets provide platform to provide complete resource solutions to customers. Annual amortizable landfill volumes in e
Slide 8: Transaction Supports Casella Strategy for the Future
8 Transaction Supports Casella Strategy for the Future Increase cash flow generation and continue to reduce leverage. Company is committed to reducing leverage to at or below 3.5x. Continue to focus on improving asset performance and increasing cash flows by profitability growing revenues, increasin
Slide 9: Divestiture Overview
9 Divestiture Overview Assets sold at an attractive valuation. Assets sold for gross proceeds of $130.4 million contributed $14.0 million of Adjusted EBITDA LTM Q2 FY11.1 Company continues to execute well against delevering strategy. 100% of net divestiture proceeds of $117.4 million used to pay dow
Slide 10: Divestiture Overview – Assets Sold in Context of Casella
10 Divestiture Overview – Assets Sold in Context of Casella 87.7% 12.3% 87.8% 12.2% $522.3 $123.6 FY 2010A ($ in millions) LTM Q2 FY 2011A ($ in millions) 87.0% 13.0% 88.9% 11.1% $537.6 $125.9 1 1 1 See Appendix for Adjusted EBITDA reconciliations to GAAP measures.
Slide 11: Use of Net Cash Proceeds
11 Use of Net Cash Proceeds Casella intends to use the net cash proceeds from the divestiture to repay the Term Loan B. Term Loan B interest rate at 7.0% (L+500bps, with 2.0% LIBOR floor). Per the Senior Secured Credit Agreement, the Company is required to: Repay Term Loan B with asset sale proceeds
Slide 12: Transaction Overview – Sources & Uses and Pro Forma Capitalization
12 Casella Waste Systems 1 Transaction Overview – Sources & Uses and Pro Forma Capitalization ($ in millions) Sources Amount % Uses Amount % Asset Sale Gross Proceeds(1) $130.4 86.5% Asset Sale Taxes and Transaction Expenses $13.0 8.6% Revolver Draw 20.4 13.5% Term Loan Paydown 128.4 85.1% Repay Fin
Slide 13: Accounting for the Divestiture
13 Accounting for the Divestiture Accounting treatment post transaction will be as follows: The FCR assets being divested will be treated as a discontinued operations, and as such, income from these operations will be treated as income from discontinued operations. Estimated non-recurring gains and
Slide 14: Updated Fiscal Year 2011 Pro forma Guidance
14 Updated Fiscal Year 2011 Pro forma Guidance FY 2011 pro forma guidance1 updated to reflect only the impact of the divestiture, estimated in following ranges: Revenues between $462.0 million and $472.0 million. Adjusted EBITDA between $109.0 million and $113.0 million. Capital Expenditures between
Slide 15: Refinancing Overview
15 Refinancing Overview As separately announced this morning, the Company launched a tender offer for all of the Company’s $195.0 million aggregate principal amount of 9.750% Senior Subordinated Notes due 2013. The tender offer is conditioned on the successful completion of the Company’s separately
Slide 16: Strengthening and Simplifying Casella
16 Strengthening and Simplifying Casella The divestiture. . . Materially strengthens Casella’s balance sheet and credit profile. Is attractive to Casella shareholders. Simplifies Casella’s business model and reduces risk exposures. Company is committed to reducing leverage to at or below 3.5x. Casel
Slide 17: Appendix
Appendix
Slide 18: Non-GAAP Measures
18 Non-GAAP Measures In addition to disclosing financial results prepared in accordance with Generally Accepted Accounting Principles (GAAP), the company also discloses earnings before interest, taxes, depreciation and amortization, adjusted for accretion, depletion of landfill operating lease oblig
Slide 19: Non-GAAP Reconciliation of Adjusted EBITDA
19 Non-GAAP Reconciliation of Adjusted EBITDA ($ in thousands) FCR Divested Assets FCR Divested Assets Fiscal Year Ended Twelve Months Ended Fiscal Year Ended Twelve Months Ended April 30, 2010 October 31, 2010 April 30, 2010 October 31, 2010 Net (loss) income (13,858) $ (13,585) $ 10,902 $ 10,267 $
Slide 20: Bank Defined Cash Flow Metric Reconciliation
20 Bank Defined Cash Flow Metric Reconciliation ($ in thousands) Twelve Months Ended October 31, 2010 Net cash provided by operating activities 65,100 $ Changes in assets and liabilities, net of effects of acquisitions and divestitures 2,997 Gain on sale of equipment and assets 4,221 Stock based com
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