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Three analysts and top management from fourteen sector firms examine the Environmental Services sector in this 64-page Environmental Services Issue from The Wall Street Transcript, available at (212/952-7433) or www.twst.com

TWST: Brad, what have you seen so far this year that you’d like to comment on?

Mr. Coltman: I would agree that industry conditions have generally remained flat through the second quarter, with pricing remaining competitive and volumes following seasonal trends. There has been no clear pickup yet from the economy, which has been the case for several quarters now. However, I do think there have been some encouraging signs in the industry, most notably from Allied Waste (AW) with their current pricing initiatives. I would also agree that the stocks moved up during the first half in anticipation of a broader economic recovery, although I would argue that some of the improved performance recognized some companies’ execution of their respective strategies. Unfortunately the stocks gave back some of those gains following second quarter earnings, which were somewhat disappointing, particularly with respect to the margin contraction experienced across the group. I do believe that some of the more recent macroeconomic data is encouraging for the longer-term outlook for the group, but it still remains too early to build that into current expectations. So for the near term, I expect the stocks’ performance to be more dependent on the execution of company-specific strategies.

TWST: Brad, what do you see happening over the next year or two?

Mr. Coltman: I would agree that the focus will remain on free cash flow. The existing six public companies grew rapidly through consolidation until the late 1990s, after which most transitioned from acquisition growth oriented strategies toward strategies focused on free cash flow. The proceeds have predominantly been used for debt reduction, share repurchases and opportunistic acquisitions. More recently, Republic Services (RSG) announced that they will begin a modest dividend program while Waste Management (WMI) is going to reallocate funds from the share repurchase program toward a notable increase in their dividend. I expect debt reduction to remain a priority for Allied Waste and acquisitions to remain a priority for Waste Connections (WCN), but longer term I think even these companies will gravitate toward returning excess cash to shareholders. This is a maturing industry.

TWST: Brad, what’s the story on Casella as your number two pick?

Mr. Coltman: I view Casella as the turnaround story that has pretty much been completed. The company had a good solid waste business before acquiring another company called KTI back in 1999. At first, the acquisition seemed like a good idea as KTI offered a fairly broad variety of complementary services that, when put together with Casella’s core solid waste operations, would provide a full range of environmental services. Unfortunately, KTI was a struggling company and although Casella thought they could turn it around, it proved more difficult than they had expected. Casella subsequently ended up adopting a back-to-basics strategy and divested most of those operations. Casella is now back being a core solid waste company, although it does have a pretty significant recycling business. Overall, we think that the operations have stabilized considerably. I think current expectations largely reflect that stability and that the upside really comes from further execution of the company’s strategy, which is principally focused on adding disposal capacity but, in between, also completing tuck-in acquisitions. Also, just like everybody else, Casella is pursuing various efficiency and productivity initiatives that should support improved performance over the longer term.

This special issue includes:

1) Environmental Services - In an in-depth (7,800 words) Roundtable Forum, Bradley Coltman, a senior analyst at Deutsche Bank Securities, Michael E. Hoffman, a Managing Director of Friedman, Billings, Ramsey Group and Amanda Tepper, a Senior Analyst at JP Morgan Securities, examine the outlook for the sector and share specific stock recommendations.

2) CEO interviews (average 2,500 words). Top management of fourteen - sector firms examine the outlook for their firm and the sector. Firms include:.

ZENON Environmental Inc., ATC Associates, CLARCOR Inc., Commodore Applied Technologies, Duratek, Environmental Safeguards, GreenMan Technologies, Life Energy & Technology Holdings, Met-Pro Corporation, PDG Environmental, Synagro Technologies, U.S. Microbics, Versar, Waste Connections.