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Casella Waste Systems announces first quarter 2022 results


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Casella Waste Systems Inc., a regional solid waste, recycling and resource management services company based in Rutland, Vermont, has released its financial results for the three months ended March 31, 2022. The company also updated certain guidance ranges for the fiscal year ending December 31, 2022.  

“I am pleased with the start to the year, in particular with our pricing programs that further improved during the quarter and are allowing us to manage well through this period of historically high inflation,” says John W. Casella, chairperson and CEO of Casella Waste. “Our team continues to do a great job navigating this complex environment with responsive pricing programs, fuel cost recovery fees and operational execution that has produced a solid start to the year during our seasonally slowest quarter.”  

For the quarter, revenues in the first quarter were $234 million up $44.5 million or 23.5 percent year-over-year, with 13 percent of the year-over-year change driven by acquisition activity and 10.5 percent of the year-over-year change resulting from organic growth.   

Solid waste revenues were up 21 percent year-over-year, with the price up 5.6 percent, volumes up a .5 percent in acquisition growth of 12.5 percent.  

Revenues in the collection line of business were up 22.6 percent year-over-year, with the price up 6.5 percent in volume slightly up. Revenues in the disposal line of business were up 14 percent year-of-year with price up 4 percent and volumes up .9 percent.  

The company says revenue growth is mainly driven by the roll-over impact from acquisitions along with newly closed deals, positive collection and disposal pricing and slightly higher solid waste volumes. It was also impacted by higher recycled commodity prices and higher price and volumes within the company’s Resource Solutions operating segment.  

“Given the rapidly rising inflationary environment, we quickly adjusted our fiscal year 2022 pricing programs at the beginning of the year, which resulted in a 6.5 percent increase in collection pricing and a 5.6 percent increase in solid waste pricing overall in the quarter,” Casella says. “We are also mitigating rising fuel costs through our fuel cost recovery fees, which float monthly to recover increases in fuel costs, albeit these trailing fees have an inherent lag in rising markets.”   

Net income was $4.2 million for the quarter or $.08 per diluted common share, down 2.8 percent compared with the net income of $4.3 million or $.08 per diluted common share, for the same period in 2021. Adjusted Net Income was $5.8 million for the quarter or $.11 adjusted diluted earnings per common share, a non-generally accepted accounting principle (GAAP) measure, up $1 million or 21.5 percent compared with adjusted net income of $4.8 million or $.09 adjusted diluted earnings per common share for the same period in 2021.  

Operating income for the first quarter was $10.2 million, down $1.8 million or 15.3 percent, from the same period in 2021. Operating income was negatively impacted in the period by about $1.5 million due to a true-up of depreciation and amortization expense related to the July 2021 acquisition of Willimantic Waste Paper Co. Inc. Adjusted operating income, a non-GAAP measure, was $12.4 million for the quarter, down 1.8 percent from the same period in 2021.   

Adjusted earnings before interest, taxation, depreciation and amortization (EBITDA) was $45.6 million for the quarter, up to $6.7 million or 17.3 percent from the same period in 2021.  

“Our pricing programs did outpace cost inflation in the quarter,” says Ned Coletta, WM’s senior vice president and chief financial officer. “However, several identifiable factors negatively impacted margins in the quarter, including the construction delays at a landfill the expected margin dilution from acquisitions, margin and headwinds from the fuel recovery fees, and margin headwinds at our transfer stations due to higher fuel surcharges on long-haul transportation.”  

Solid waste adjusted EBITDA was $38.7 million in a quarter up to $4.1 million year-over-year, Coletta added.  

Net cash provided by operating activities was $24.7 million for the quarter compared with $32.1 million for the same period in 2021, with the negative year-over-year change mainly due to timing differences in accounts receivable due to acquisition activity that is expected to resolve during the fiscal year 2022. Adjusted Free Cash Flow was $16.3 million for the quarter compared with $10.2 million for the same period in 2021.   

For the company’s fiscal year 2022 outlook, the company has raised certain guidance resulting in the following estimates:  

  • revenues between $1.005 billion and $1.020 billion (raised from a range of $980 million to $995 million);  

  • adjusted EBITDA between $232 million and $236 million (raised from a range of $228 million to $232 million); 

  • net cash provided by operating activities between $204 million and $208 million (raised from a range of $202 million to $206 million).  

  • net income between $48 million and $52 million; and  

  • adjusted Free Cash Flow between $104 million and $108 million.   

“Given the expected positive contribution from the Northstar acquisition coupled with our strong operating execution, we are updating certain fiscal year 2022 guidance ranges that were first announced in February,” Casella says. “These guidance ranges assume a stable economic environment continuing through the remainder of the year, including the current historically high inflationary environment. We expect our pricing and cost recovery fees to outpace inflation for the remainder of the year to drive margin expansion year-over-year.”  

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