<PAGE>
EXHIBIT 99.1
PREFERRED STOCK PURCHASE AGREEMENT PRESS RELEASE
CASELLA WASTE SYSTEMS, INC. REPORTS EARNINGS OF 19 CENTS PER SHARE IN
FOURTH QUARTER OF FISCAL 2000
COMPANY ANNOUNCES NEW FINANCING, AND RESTRUCTURING OF NON-CORE
BUSINESSES; GIVES GUIDANCE ON FISCAL YEAR 2001
RUTLAND, VERMONT (June 28, 2000)--Casella Waste Systems, Inc.
(NASDAQ: CWST), a regional, non-hazardous solid waste services company,
today reported financial results for the fourth quarter of its 2000
fiscal year.
For the quarter ended April 30, 2000, the company reported net
income of $4.3 million, versus $1.4 million for the same period last
year, a 207 percent increase.
Fully diluted earnings per share for the quarter were $0.19.
Revenue for the quarter was $134.0 million versus $46.4 million
for the same period a year ago. EBITDA (earnings before interest,
taxes, depreciation and amortization) increased 156 percent to $30.0
million, compared to $11.7 million in the same period last year.
For the fiscal year ended April 30, 2000, the company reported net
income of $16.5 million; revenues for the year were $337.3 million.
EBITDA was $84.4 million.
Results for the three- and twelve-month periods are pro forma, and
exclude the impact of a write-off of unamortized debt acquisition
costs; the loss and write-off, primarily non-cash, related to the
discontinuation and loss on sale of certain non-core operations;
non-cash equity loss on investment; merger costs which occurred in the
first quarter; and a gain on the sale of a company metal facility.
"Both our company's performance and the markets we serve continue
to be marked by strong underlying fundamentals," John Casella,
president and CEO of Casella Waste Systems, said. "Once again, one of
the most compelling indicators of this fundamental strength is the
consistent delivery of our EBITDA margin targets."
CELLULOSE INSULATION BUSINESS STRUCTURED AS A JOINT VENTURE
The company also said it had entered into an agreement with
Louisiana-Pacific Corp. (NYSE: LPX) to combine their respective
cellulose insulation businesses into a single operating entity under a
joint venture agreement effective July 1, 2000.
The new company, to be known as U.S. GreenFiber LLC, is an equally
owned joint venture formed through the combination of
Louisiana-Pacific's GreenStone Industries Inc. and Casella Waste
Systems' U.S. Fibers operations. The new entity will supply
<PAGE>
cellulose insulation to existing residential construction, retail and
manufactured housing supply channels. GreenFiber's operations, which
will produce approximately $100 million in revenues, will be handled by
a single management team located in Charlotte, North Carolina.
"This joint venture combines Louisiana-Pacific's manufacturing
expertise with our capacity to be a stable long-term supplier of high
quality fiber, making GreenFiber the nation's lowest cost, largest
manufacturer of cellulose insulation," Casella said.
"While U.S. Fibers was not by any stretch a `core' solid waste
business, there is a compelling opportunity to be part of building a
strong, cash flow-generating operation that, at the very least, is a
path towards monetizing that business at a higher valuation than
currently exists," Casella said. "This restructuring gives us this
flexibility, at the same time mitigating its financial impact."
COMPANY RAISING CAPITAL THROUGH CONVERTIBLE PREFERRED STOCK
The company announced that it has entered into an agreement with
Berkshire Partners of Boston, Massachusetts to issue convertible
preferred stock which may convert into Class A Common Stock at $14.00
per share. The company expects to raise approximately $55 million in
the transaction, which the company believes will be instrumental in
strengthening its financial foundation, allow it to continue to execute
its growth plan, as well as allowing other strategic initiatives. The
closing of the transaction is subject to receipt of regulatory
approvals and other customary closing conditions.
PLASTICS MANUFACTURING BUSINESS HELD FOR SALE
The company also announced that it is selling its plastics
manufacturing business, and is carrying the business as an asset held
for sale at its realizable net value.
"This line of business has not performed to expectations and, it
does not warrant the required investment of management time and
resources," Casella said. "As a result, it will be sold."
EARNINGS PROJECTION FOR FISCAL YEAR 2001
The company also said it is adjusting its projected earnings per
share for fiscal year 2001, which began on May 1, 2000. The company
said it expects net income of approximately $19.5 million, or $0.72 per
share, and EBITDA to be approximately $133.0 million.
"We remain driven to create long-term value, and continue to focus
on EBITDA as our performance yardstick," Casella said.
"The shift in EBITDA for 2001 to $133 million from $140 million is
primarily due to moving our cellulose insulation business into a joint
venture and discontinuing our plastics operation," Casella said. "It is
an indication that our core businesses will
<PAGE>
continue to perform as expected.
"The shift in EPS is primarily the result of a higher book income
tax rate, higher goodwill amortization expenses associated with the KTI
acquisition, higher interest rate expenses, and the impact of preferred
stock--items we strongly believe do not reflect the health of our core
businesses, or our ability to create long-term value," Casella said.
"Our historically proven approach has always been to aggregate
quality assets strategically, integrate and rationalize them, and
generate attractive EBITDA margins," Casella said. "We are, in a
fundamental and disciplined way, executing this strategy once again
with the former KTI assets--integrating and polishing, reinvesting
where necessary, and building a market-focused business that, over
time, we expect should deliver the desired results."
Casella Waste Systems, headquartered in Rutland, Vermont, is a
regional, integrated, non-hazardous solid waste services company that
provides collection, transfer, disposal and recycling services
primarily in the northeastern United States.
For further information, contact Joseph Fusco, vice president; or
Jerry Cifor, chief financial officer at (802) 775-0325. The company's
website is http://www.casella.com.
The company will host a conference call to discuss these results
on Thursday, June 29, 2000 at 10:00 a.m. EDT. Individuals interested in
participating in the call should dial 913-981-4910 at least 10 minutes
before start time. A replay of the call will be available by calling
719-457-0820 (conference code 776641) before 11:59 p.m. EDT, Thursday,
July 6, 2000.
This press release contains forward-looking statements that
involve a number of risks and uncertainties. Among the important
factors that could cause actual results to differ materially from those
indicated by such forward-looking statements are the ability of the
Company to realize the anticipated synergies and other operating
benefits from the acquisition of KTI, the Company's ability to manage
growth, the accuracy of the company's financial projections, a history
of losses, the ability to identify, acquire and integrate acquisition
targets, dependence on management, the uncertain ability to finance the
company's growth, limitations on landfill permitting and expansion and
geographic concentration, changes in the market prices of recyclable
materials, and the risk factors detailed from time to time in the
company's periodic reports and registration statements filed with the
Securities and Exchange Commission.
<PAGE>
CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended Year Ended
---------------------------------- ----------------------------------
April 30, April 30, April 30, April 30,
(000's omitted) 1999(1) April 30, 2000(2) 1999(1) April 30, 2000 (2)
(restated) 2000 (proforma) (restated) 2000 (proforma)
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Revenues $ 46,352 $ 133,919 $ 133,919 $ 182,556 $ 337,347 $ 337,347
--------- --------- --------- --------- --------- ---------
Operating Expenses:
Cost of Operations 27,314 87,906 87,906 108,874 210,733 210,733
General and Administrative 6,523 15,969 15,969 26,616 42,263 42,263
Depreciation and Amortization 6,661 14,448 14,448 25,725 40,211 40,211
Merger Costs (Pooling) 786 0 0 1,951 1,491 0
--------- --------- --------- --------- --------- ---------
41,284 118,323 118,323 163,166 294,698 293,207
--------- --------- --------- --------- --------- ---------
Operating Income 5,068 15,596 15,596 19,390 42,649 44,140
--------- --------- --------- --------- --------- ---------
Other (Income) Expenses
Interest Expense, Net 1,397 7,068 7,068 5,564 15,051 15,051
Other Expense (Income), net (96) 2,623 2,623 (352) 1,999 1,999
Loss on Sale of Assets 0 0 (1,152) 0 0 (1,152)
Equity Loss on Investment 0 0 (840) 0 0 (840)
Add Back Gain on Sale of Facility 0 0 0 0 0 128
--------- --------- --------- --------- --------- ---------
1,301 9,691 7,699 5,212 17,050 15,186
--------- --------- --------- --------- --------- ---------
Income from Continuing Operations before Income
Taxes and Extraordinary Items 3,767 5,905 7,897 14,178 25,599 28,954
Provision for Income Taxes 2,265 3,524 3,553 7,531 12,257 12,475
--------- --------- --------- --------- --------- ---------
Income from Continuing Operations 1,502 2,381 4,344 6,647 13,342 16,479
Discontinued Operations, Net of Tax Effect:
(Income)/Loss from Discontinued Operations 97 0 0 33 269 0
Loss on Disposal of Discontinued Operations 0 0 0 0 1,393 0
Total Discontinued Operations 97 0 0 33 1,662 0
Extraordinary Item, Net of Tax Effect:
Early Extinguishment of Debt 0 0 0 0 631 0
Net Income 1,405 2,381 4,344 6,614 11,049 16,479
========= ========= ========= ========= ========= =========
EBIT 5,068 15,596 15,596 19,390 42,649 44,140
EBITDA 11,729 30,044 30,044 45,115 82,860 84,351
Common Stock and Common
Stock Equivalent Shares Outstanding,
Assuming Full Dilution 16,342 23,476 23,476 16,000 19,272 19,272
========= ========= ========= ========= ========= =========
Diluted Earnings per Share $ 0.09 $ 0.10 $ 0.19 $ 0.41 $ 0.57 $ 0.86
========= ========= ========= ========= ========= =========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
NOTES:
(1) Financial Statements have been restated to reflect the following merger
transactions, all accounted for as poolings of interests:
Resource Waste Systems, Inc., Resource Transfer Services, Inc., and Resource
Recovery of Cape Cod, Inc. (Collectively "Resource Waste Systems")
Corning Community Disposal, Inc.
(2) The year ended April 30, 2000 pro forma results exclude merger costs in the
amount of $1,491,000 which occurred during the first quarter. Additionally,
the pro forma results exclude the impact of discontinued operations, early
extinguishment of debt, loss on sale of assets, and equity loss on
investment. The pro forma results also exclude the one-time gain on the sale
of a metal facility in the amount of $128,000
<PAGE>
CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Year Ended
----------------------------------------------------------- ----------
July 31, October 31, January 31,
1998 (1) 1998 (1) 1999 (1) April 30, April 30,
(restated) (restated) (restated) 1999 1999
------------ ------------ ------------ ------------ ----------
<S> <C> <C> <C> <C> <C>
Revenues $ 42,666,782 $ 45,035,237 $ 41,983,753 $ 133,919 #REF!
------------ ------------ ------------ ------------ ----------
Operating Expenses:
Cost of Operations 25,265,226 25,911,885 24,104,279 87,906 #REF!
General and Administrative 6,171,864 6,488,330 6,618,448 15,969 #REF!
Depreciation and Amortization 5,742,705 6,502,722 6,226,358 14,448 #REF!
Merger Costs (Pooling) 16,788 766,509 393,693 0 #REF!
------------ ------------ ------------ ------------ ----------
37,196,583 39,669,446 37,342,778 118,323 #REF!
------------ ------------ ------------ ------------ ----------
Operating Income 5,470,199 5,365,791 4,640,975 15,596 #REF!
------------ ------------ ------------ ------------ ----------
Other (Income) Expenses
Interest Expense, Net 1,803,651 827,274 1,089,958 7,068 #REF!
Other Expense (Income), net (256,828) 66,844 (65,378) 2,623 #REF!
------------ ------------ ------------ ------------ ----------
1,546,823 894,118 1,024,580 9,691 #REF!
------------ ------------ ------------ ------------ ----------
Income Before Provision for Income Taxes and
Extraordinary Items 3,923,376 4,471,673 3,616,395 5,905 #REF!
Provision for Income Taxes 1,675,208 1,917,911 1,714,279 3,524 #REF!
------------ ------------ ------------ ------------ ----------
Net Income 2,248,168 2,553,762 1,902,116 2,381 #REF!
============ ============ ============ ============ ==========
EBIT 5,470,199 5,365,791 4,640,975 15,596 #REF!
EBITDA 11,212,904 11,868,513 10,867,333 30,044 #REF!
Common Stock and Common
Stock Equivalent Shares Outstanding,
Assuming Full Dilution 14,047,340 16,208,222 16,323,886 15,979,045 15,636,859
============ ============ ============ ============ ==========
Diluted Earnings per Share $ 0.160 $ 0.158 $ 0.117 $ 0.000 #REF!
============ ============ ============ ============ ==========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
NOTES:
(1) Financial Statements have been restated to reflect the following merger
transactions, all accounted for as poolings of interest:
<TABLE>
<S> <C> <C>
Waste Stream Inc., B&C Sanitation Corporation, Collectively "Waste Stream"
North Country Trucking, Inc., Better Bedding Corp.,
R.A. Bronson, Inc., BBC LLC, NTC LLC and
Grasslands, Inc.
Northern Sanitation, Inc. and Northern Properties Corp. Collectively "Northern Sanitation" Consummated 12/23/98
of Plattsburgh, Inc.
Natural Environmental, Inc., Schultz Landfill, Inc., Collectively "NEI" Consummated 4/30/99
and Blasdell Development Group, Inc.
Westfield Disposal Service, Inc., and Portland C & D Collectively "Westfield Disposal" Consummated 4/30/99
Landfill, Inc.
</TABLE>
<PAGE>
CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
------------------------------------------- -------------------------------------------
January 31, January 31, January 31, January 31,
1999(1) January 31, 2000(2) 1999(1) January 31, 2000 (2)
(restated) 2000 (proforma) (restated) 2000 (proforma)
------------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Revenues $ 44,109,000 $ 93,003,878 $ 93,003,878 $ 136,204,000 $ 203,427,563 $ 203,427,563
------------- ------------- ------------- ------------- ------------- -------------
Operating Expenses:
Cost of Operations 26,351,000 61,451,815 61,451,815 81,560,000 122,825,887 122,825,887
General and Administrative 7,060,000 11,413,226 11,413,226 20,093,000 26,293,631 26,293,631
Depreciation and Amortization 6,481,000 10,193,287 10,193,287 19,064,000 25,762,736 25,762,736
Merger Costs (Pooling) 468,000 0 0 1,165,000 1,490,426 0
------------- ------------- ------------- ------------- ------------- -------------
40,360,000 83,058,328 83,058,328 121,882,000 176,372,680 174,882,254
------------- ------------- ------------- ------------- ------------- -------------
Operating Income 3,749,000 9,945,550 9,945,550 14,322,000 27,054,883 28,545,309
------------- ------------- ------------- ------------- ------------- -------------
Other (Income) Expenses
Interest Expense, Net 1,285,000 4,774,341 4,774,341 4,167,000 7,983,356 7,983,356
Other Expense (Income), net (65,000) (119,774) (119,774) (256,000) (623,576) (623,576)
Gain on Sale of Facility 0 0 0 0 0 0
------------- ------------- ------------- ------------- ------------- -------------
1,220,000 4,654,567 4,654,567 3,911,000 7,359,780 7,359,780
------------- ------------- ------------- ------------- ------------- -------------
Income Before Provision for
Income Taxes
Discontinued Operations and
Extraordinary Items 2,529,000 5,290,983 5,290,983 10,411,000 19,695,103 21,185,529
Provision for Income Taxes 1,689,000 2,433,483 2,433,483 5,266,000 8,611,188 8,921,871
------------- ------------- ------------- ------------- ------------- -------------
Net Income from Continuing Operations 840,000 2,857,500 2,857,500 5,145,000 11,083,915 12,263,658
Discontinued Operations, Net of
Tax Effect:
(Gain)/Loss from Discontinued
Operations (2) (39,000) 78,564 0 (64,000) 269,083 0
Loss on Disposal of Discontinued
Operations (2) 0 1,393,232 0 0 1,393,232 0
Total Discontinued Operations (39,000) 1,471,796 0 (64,000) 1,662,315 0
Extraordinary Items, Net of Tax Effect:
Early Extinguishment of Debt (2) 0 631,283 0 0 631,283 0
Net Income 879,000 754,421 2,857,500 5,209,000 8,790,317 12,263,658
============= ============= ============= ============= ============= =============
EBIT 3,749,000 9,945,550 9,945,550 14,322,000 27,054,883 28,545,309
EBITDA 10,230,000 20,138,837 20,138,837 33,386,000 52,817,619 54,308,045
Common Stock and Common
Stock Equivalent Shares Outstanding,
Assuming Full Dilution 16,687,000 20,265,517 20,265,517 15,890,000 16,506,818 16,506,818
============= ============= ============= ============= ============= =============
Diluted Earnings per Share $ 0.050 $ 0.037 $ 0.141 $ 0.328 $ 0.533 $ 0.743
============= ============= ============= ============= ============= =============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
NOTES:
(1) Financial Statements have been restated to reflect the following merger
transactions, all accounted for as poolings of interests:
<TABLE>
<S> <C>
Natural Environmental, Inc., Schultz Landfill, Inc., Collectively "NEI"
and Blasdell Development Group, Inc.
Westfield Disposal Service, Inc., and Portland C & D Collectively "Westfield Disposal"
Landfill, Inc.
Resource Waste Systems, Inc., Resource Transfer Services, Inc., and Resource Recovery of Cape Cod, Inc.
(Collectively "Resource Waste Systems")
Corning Community Disposal, Inc.
</TABLE>
(2) The quarter ended January 31, 2000 pro forma results and the nine months
ended January 31, 2000 pro forma results exclude merger costs in the
amount of $1,490,426 which occurred during the first quarter.
Additionally, the proforma results exclude the effects of losses from
discontinued operations of Aaron and Sons (net of tax effect ) and the
early extinguishment of debt (net of tax effect)
<PAGE>
CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES
RECONCILIATION OF QUARTERS
(UNAUDITED)
<TABLE>
<CAPTION>
Actual
October January 31, Effects of 9 Month
31 2000 Discontinued January
1999 3 month Operations 2000
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues $ 111,155,871 $ 93,003,878 ($ 732,188) $ 203,427,561
------------- ------------- ------------- -------------
Operating Expenses:
Cost of Operations 62,036,630 61,451,815 (662,558) $ 122,825,887
General and Administrative 15,161,560 11,413,226 (281,154) $ 26,293,632
Depreciation and Amortization 15,666,771 10,193,287 (97,322) $ 25,762,736
Merger Costs (Pooling) 1,490,426 0 0 $ 1,490,426
------------- ------------- ------------- -------------
94,355,387 83,058,328 (1,041,034) 176,372,681
------------- ------------- ------------- -------------
Operating Income 16,800,484 9,945,550 308,846 27,054,880
------------- ------------- ------------- -------------
Other (Income) Expenses
Interest Expense, Net 3,212,496 4,774,341 (3,480) $ 7,983,357
Other Expense (Income), net (503,802) (119,774) 0 ($ 623,576)
Gain on Sale of Facility 0 0 0 $ 0
------------- ------------- ------------- -------------
2,708,694 4,654,567 (3,480) 7,359,781
------------- ------------- ------------- -------------
Income Before Provision for Income Taxes
Discontinued Operations and Extraordinary Items 14,091,790 5,290,983 312,326 19,695,099
Provision for Income Taxes 6,177,705 2,433,483 121,807 $ 8,732,995
------------- ------------- ------------- -------------
Net Income from Continuing Operations 7,914,085 2,857,500 190,519 10,962,104
Discontinued Operations, Net of Tax Effect:
(Gain)/Loss from Discontinued Operations (2) 0 78,564 190,519 $ 269,083
Loss on Disposal of Discontinued Operations (2) 0 1,393,232 0 $ 1,393,232
Total Discontinued Operations 0 1,471,796 190,519 1,662,315
Extraordinary Items, Net of Tax Effect:
Early Extinguishment of Debt (2) 0 631,283 0 $ 631,283
Net Income 7,914,085 754,421 0 8,668,506
============= ============= ============= =============
EBIT 16,800,484 9,945,550 27,054,880
EBITDA 32,467,255 20,138,837 52,817,616
Common Stock and Common
Stock Equivalent Shares Outstanding,
Assuming Full Dilution 16,506,818 20,265,517 17,758,558
============= ============= =============
Diluted Earnings per Share $ 0.479 $ 0.037 $ 0.617
============= ============= =============
<CAPTION>
Proforma
October January 31, Effects of 9 Month
31 2000 Discontinued January
1999 3 month Operations 2000
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues $ 111,155,871 $ 93,003,878 $ 0 $ 204,159,749
------------- ------------- ------------- -------------
Operating Expenses:
Cost of Operations 62,036,630 61,451,815 0 $ 123,488,445
General and Administrative 15,161,560 11,413,226 0 $ 26,574,786
Depreciation and Amortization 15,666,771 10,193,287 0 $ 25,860,058
Merger Costs (Pooling) 0 0 0 $ 0
------------- ------------- ------------- -------------
92,864,961 83,058,328 0 175,923,289
------------- ------------- ------------- -------------
Operating Income 18,290,910 9,945,550 0 28,236,460
------------- ------------- ------------- -------------
Other (Income) Expenses
Interest Expense, Net 3,212,496 4,774,341 0 $ 7,986,837
Other Expense (Income), net (503,802) (119,774) 0 ($ 623,576)
Gain on Sale of Facility 128,213 0 0 $ 128,213
------------- ------------- ------------- -------------
2,836,907 4,654,567 0 7,491,474
------------- ------------- ------------- -------------
Income Before Provision for Income Taxes
Discontinued Operations and Extraordinary Items 15,454,003 5,290,983 0 20,744,986
Provision for Income Taxes 6,488,388 2,433,483 0 $ 8,921,871
------------- ------------- ------------- -------------
Net Income from Continuing Operations 8,965,615 2,857,500 0 11,823,115
Discontinued Operations, Net of Tax Effect:
(Gain)/Loss from Discontinued Operations (2) 0 0 0 $ 0
Loss on Disposal of Discontinued Operations (2) 0 0 0 $ 0
Total Discontinued Operations 0 0 0 0
Extraordinary Items, Net of Tax Effect:
Early Extinguishment of Debt (2) 0 0 0 $ 0
Net Income 8,965,615 2,857,500 0 11,823,115
============= ============= ============= =============
EBIT 18,290,910 9,945,550 28,236,460
EBITDA 33,957,681 20,138,837 54,096,518
Common Stock and Common
Stock Equivalent Shares Outstanding,
Assuming Full Dilution 16,506,818 20,265,517 17,758,558
============= ============= =============
Diluted Earnings per Share $ 0.543 $ 0.141 $ 0.666
============= ============= =============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
NOTES:
(1) Financial Statements have been restated to reflect the following merger
transactions, all accounted for as poolings of interests:
<TABLE>
<S> <C>
Natural Environmental, Inc., Schultz Landfill, Inc., Collectively "NEI"
and Blasdell Development Group, Inc.
Westfield Disposal Service, Inc., and Portland C & D Collectively "Westfield Disposal"
Landfill, Inc.
Resource Waste Systems, Inc., Resource Transfer Services, Inc., and Resource Recovery of Cape Cod, Inc.
(Collectively "Resource Waste Systems")
Corning Community Disposal, Inc.
</TABLE>
(2) The quarter ended January 31, 2000 pro forma results and the nine months
ended January 31, 2000 pro forma results exclude merger costs in the
amount of $1,490,426 which occurred during the first quarter.
Additionally, the proforma results exclude the effects of losses from
discontinued operations of Aaron and Sons (net of tax effect ) and the
early extinguishment of debt (net of tax effect)
