Advanced Disposal, Ponte Vedra, Florida, reports adjusted free cash flow increased 10 percent to 145.6 million in 2018. The fourth quarter capped off a “solid” 2018, where Advanced executed on several key financial targets, including organically growing the business by nearly 4 percent and the completion of acquisitions worth $30 million.
"We did all this in an environment that saw commodity prices fall 42 percent on average in 2018 and diesel fuel cost per gallon increased 21 percent,” CEO Richard Burke said during the company's fourth quarter earnings call.
Advanced Disposal completed 12 acquisitions during 2018, which “strengthened” the company's operational footprint in new and existing markets. Acquisitions included the purchase of an Alabama hauling company and a municipal solid waste (MSW) landfill with a remaining 50 years of service.
While volume decreased slightly in Q4, the company gained “positive momentum on the residential line of business.”
Burke reports revenue from sale of commodities declined due to falling fiber prices, including the price for OCC falling from $84 per ton in Q4 2017 to $63 per ton in Q4 2018.
“We have continued our efforts to educate our customers around the impacts of contamination and the cost of recycling, along with securing price increasing” around the collection of recyclables, Burke says.
Despite higher fuel costs and decline in OCC, Advanced Disposal will continue to invest toward a “digital transformation” to improve customer experience. By April, Advanced will launch a pilot portal, where customers will be able to view their account online, request a container and schedule an extra pickup on their phone or laptop.
Moving into 2019, Burke expects to spend $50 to $75 million over the course of the year on deals in new markets and disposal markets to expand the company's operational footprint. Another top priority will be the recruitment of area drivers and mechanics who are “at the heart of every key metric we have, whether it be safety, service, productivity, customer satisfaction or bottom-line financial results," Burke says.
In 2019, Advanced Disposal projects revenue of $1.60 to $1.63 billion. Funds will be used to close acquisitions and repay debt.