Performance issues following a major acquisition drove the market value of Casella Waste Systems and its credibility with Wall Street to an all-time low.  Based on conversations with Casella’s shareholders and analysts, the investment community was looking for a simplified approach returning to the basic business drivers that lead to the company’s successful IPO and secondary offering.  From the attached charts, you will see direct results in the stock performance of the company based on its communications.  By outlining early in the turnaround process, the measures Casella would take to right its path, and making follow up announcements tracking its progress Casella was among the 90th percentile of best performing stocks on Nasdaq in 2001.


When Casella Waste Systems went public in 1997, it was highly focused on providing non-hazardous solid waste services in the northeastern United States.  As a regional player in a consolidating industry, however, the company’s growth was largely dependent on acquisition candidates that fit this specific model – a formula that would ultimately limit its long-term growth potential.  To break out of this mold, the company announced in 1999 it would acquire a larger, New Jersey outfit, KTI.  Through this acquisition, Casella would expand its geographic reach and diversify its revenue streams.  At around the same time, “consolidators” fell out of favor with Wall Street, and KTI missed forecasted earnings results.  Subsequently, after renegotiating the terms of the transaction and following the completion of the acquisition, CWST missed Wall Street forecasts three consecutive quarters.  In turn, the company’s market valuation suffered considerably.


Until the KTI acquisition, Wall Street held the Casella management team in high regard for its focus, consistency and ability to execute.  Our number one goal, therefore, was to rebuild management’s credibility with the Street, and demonstrate a track record of delivering upon a new set of promises.


· Solicit detailed opinions from shareholders and analysts to gauge impression of strategy; management; long-term potential; and, communications challenges
· Announce a clear strategy to focus on core businesses, detailing specific assets intended to be divested and their contribution to Revenue and EBITDA margin
· Provide a series of updates tracking progress of divestitures
· Host investor day to review in detail the company’s plan, actions to date, and the structure of the remaining entity and timetable


· Casella’s stock price increased from a 52-week low of $3.25 on November 30 to a 52-week high of $14.54 on December 10, 2001, a 347% increase.  (Stock is trading at $14.24 as of the close of trading on December 11, 2001)
· CWST ranks in the 90th percentile of best performing stocks on the Nasdaq in 2001
· Casella’s market cap increased over 4x to approximately $340 million from approximately $76 million (peak to trough)
· Three of six analysts now rank the firm a buy or strong buy.  Remaining three maintain hold ratings company achieved $100 million in net proceeds from divested non-core assets