GFL Environmental Inc., Ontario, announced its first-quarter results May 11.

According to the company, revenue increased by 29.2 percent to $931.3 million in the first quarter compared with the first quarter of 2019, driven by significant revenue growth across all reportable segments organically and through acquisitions.

Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) increased 24.4 percent to $222.9 million in the first quarter compared with the first quarter of 2019, primarily attributable to strong revenue growth in the quarter. Net loss increased from $93.4 million in the first quarter of 2019 to $277.9 million in the first quarter of 2020 driven by costs associated with the company’s initial public offering, the early redemption of several series of its outstanding unsecured bonds and the extinguishment of its 11 percent payment-in-kind notes as part of the preclosing capital changes implemented immediately prior to its initial public offering.

"When we completed our initial public offering on March 5 of this year, we never thought we would be reporting our first quarter as a public company in such unprecedented times. Despite the significant slowdown of the Canadian and U.S. economies in late March resulting from government measures to limit the spread of COVID-19, we grew revenue in the quarter by 29.2 percent and adjusted EBITDA by 24.4 percent compared with the first quarter of 2019. Our strong results for the quarter demonstrate the resiliency of our business model," Patrick Dovigi, founder and CEO of GFL, says. "I am very proud of the hard work and commitment of our over 13,000 employees. Without them, we would not have been able to successfully continue to provide our essential services to our customers and communities during these challenging times. Throughout the outbreak of COVID-19, we have remained focused on ensuring the health and safety of our employees.

“We used the proceeds from our IPO to significantly de-lever our balance sheet. In April, we raised $500 million of 4.25 percent secured bonds maturing in June 2025, a net leverage neutral financing. Together, these financings have well-positioned us to further execute our growth strategy and take advantage of opportunities as they present themselves," Dovigi says.

COVID-19 response and impact

The primary impact to GFL’s business in the wake of the COVID-19 pandemic has been reduced commercial and industrial collection volumes as some of its customers reduced or suspended services in response to measures enacted by local authorities, the company says. The company says that its primary markets, most notably Toronto and Montreal, were more significantly impacted than its secondary markets throughout Canada and the U.S. where the company generates almost two-thirds of its solid waste revenues.

GFL says the company has enacted a series of initiatives to help protect its employees from the virus, including:

• establishing a risk-management team of senior leadership and operational leads to identify, assess and respond to the impact of COVID-19 on its operations and personnel;
• implementing physical distancing protocols recommended by local public health authorities;
• reinforcing proper hygiene practices and increasing frequency of cleaning facilities, trucks and equipment;
• ensuring appropriate personal protective equipment and sanitization supplies are available; and
• enhancing employee communications to reinforce safe practices.

GFL says it also has closely managed its operating expenses and capital expenditures by deferring nonessential capital expenditures, reducing variable costs such as overtime, restricting discretionary spending such as travel and postponing merit increases for salaried employees.

The first quarter reflected a partial month's impact of COVID-19, the company says, whereas the second quarter is expected to include a full quarter of COVID-19-related impacts. The revenue results for April reflected a 15.8 percent increase over April 2019. Excluding the impact of acquisitions and foreign exchange, April revenue was 9.9 percent less than April 2019, a decline primarily resulting from reduced commercial and industrial collection volume that the company believes is primarily attributable to the economic impact of COVID-19.

Solid waste revenue for the month of April reflected an 8.7 percent decline as compared with April 2019 or a 4.2 percent decline when excluding the Canadian solid waste business which was disproportionately impacted by the shutdown of commercial activity in the provinces of Ontario and Quebec, the company says. Over the past several weeks, the company says it has seen sequential increases in commercial and industrial collection activity.

GFL notes that it remains well-capitalized and has ample liquidity available, including more than $700 million in cash as of April 30 and more than $600 million available under its revolving credit facility. As a result of the repayment of debt with the proceeds from its initial public offering, it has no material debt maturing over the next five years.

GFL earnings call

GFL followed up its Q1 earnings report with its Q1 earnings call May 12. During the call, Dovigi discussed the company’s quarterly performance and how it navigated changes due to COVID-19.

Dovigi on how the company mitigated the impact of COVID-19 during Q1

“As we said on our investor call in April, because of the high proportion of our revenues coming from our service-based collection, we have a highly variable cost structure. As volume slowed, we reduced our operating cost by consolidating collection routes, parking trucks and reducing overtime hours while our disposal costs … and fuel costs naturally flex down with reduced volumes. At the same time, we reorganized our workforce across our service offerings and business lines to minimize the disruption to our employees.”

Dovigi on GFL’s M&A activity in Q1

“In terms of M&A, we completed eight acquisitions during the quarter. Five of these completed at the time of the IPO (initial public offering), including County [Waste] and American Waste, and we closed three additional tuck-in acquisitions around the beginning of March. We deployed $1.1 billion of capital on County and American and approximately $70 million of capital on the six tuck-in acquisitions. Although there have been some delays because of COVID-related travel restrictions, the integration of both County and American are progressing very well.

“With the highly successful financing that we completed last month, we have over $1.3 billion in liquidity and are ready to capitalize on opportunities as they arise. We have temporarily delayed the closing of a few smaller tuck-in acquisitions since the onset of the pandemic, but we continue to progress on several opportunities and our pipeline continues to be robust.”

Dovigi on the company’s pricing strategy

“Previous to 2018, we didn’t spend five minutes focusing on price as we were building the business. There was much more of a [focus] on growing volume and growing market share versus growing price, and then post the acquisition of Waste Industries and watching how they increase the margins from [around] 23 percent to 24 percent up to [around] 27.5 percent to 28.5 percent, we took that playbook and started rationalizing our entire book of business in the nine provinces in Canada and 23 states in the U.S. [where we operate]. So, pricing continues to be strong. I think as we've rationalized the existing book and level-set that existing book, we're going to continue being focused on prices.”

Dovigi on service cancellations 

“We've had very minimal service cancellations. … As customers have called in and asked to temporarily suspend their service because they're closed, we've worked with those customers on a case-by-case basis.

“So, I would say there's been very little out and out terminations. I think if you look at the customer base today, about 6 to 7 percent of the commercial customer base has called in and asked to either temporarily suspend or change their frequencies. So, I don't think there's a permanent impairment, but again, it's still early days. … We are seeing sort of material uptakes and people now wanting to get their service back online—it's going to take some time to get back to the service level that we were at, but I think all in all from what we're seeing, there has been very little termination of services.”

Of the 268 million tons of municipal solid waste (MSW) generated in 2017, 139 million tons was sent to landfill, according to a report from the Environmental Protection Agency (EPA).

Luckily with this incoming volume, gone are the days of the town dump. Today’s landfills are using greener methods to safely cover waste; generate energy from the underground methane gases; and give a second life after closure in the form of nature preserves, golf courses and even amphitheaters.

The number of landfills in the U.S. has dropped from 7,600 in the early 1980s to less than 2,000 today due to stricter land use regulations and a swell in recycling. Those that remain, however, are increasing in size.

"That size of machine is crucial to us. At a landfill this large, you need to move material quickly,” –David Strayer, assistant ops manager, Lycoming County Landfill

Lycoming County Resource Management Services operates a 500-acre site in north central Pennsylvania that includes a landfill, material recovery facility and recycling center. The landfill comprises 100 acres of the property. When opened in 1978, the landfill averaged 16,689 tons of MSW annually. Today, it receives 1,100 tons daily of MSW, including food scraps, product packaging, clothing, bottles, newspapers and other common household items that consumers do not recycle.

After waste, the second chief component of landfills is commonly dirt and shale, both of which are in abundance at the Lycoming County Landfill. For this reason, the landfill’s operators use shale and crushed rock from the site to build and maintain roadways to dumping areas and pad and cover the landfill’s underground cells.

A landfill cell is a complex creature. Each cell at the Lycoming County Landfill is approximately 10-square acres. The bottom of these cells are lined with geotextile matting and three feet of protective stone. Next, several layers of clay are compacted over the rock, and then a plastic cell liner is spread over the open cell before any waste is added. To further prevent groundwater contamination, PVC piping is latticed across the cell to collect leachate and funnel it to nearby lagoons. When filled, rock, soil and clay are used to cap and close the cells, then they are reseeded and returned to undisturbed grassland.

“It’s nice to be able to supply our own stone,” David Strayer, assistant operations manager at the Lycoming County Landfill, says. “That is not a resource most landfills have available. We have a very hard vein of blue shale at our pit, and since we are in close proximity to [populated] areas, we cannot blast. Instead, we use an excavator with a hammer or single shank ripper to break it into slabs that we can run through our crusher and screen to the right size. We have a McCloskey C50 jaw crusher as well as a Screen Machine Spyder 516T and a Finlay 833 screen plant that allow us to produce stone from a powder—size 3/8-inch-minus up to 8- or 6-inch-minus rock for roads.”

A Volvo L350F wheel loader is the landfill’s flagship machine to shuttle shale from the pit to the two on-site crushers or load its fleet of five Volvo articulated haulers. The 10-yard-cubed face loader, which is the largest in the Volvo lineup, is powered by a 16-liter, 532 horsepower Volvo engine.

According to Strayer, the L350F is one of the most important pieces of equipment the team employs since it is large enough to handle the requirements the site’s operators demand of it.

“That size of machine is crucial to us,” Strayer says. “At a landfill this large, you need to move material quickly and this size of loader paired with the Volvo 40-ton haul trucks allow us to do that with less wear and tear on the equipment, less waiting time to load and, ultimately, less stress on your operator.”

The right equipment is critical for maintaining the scope of the landfill’s operations, which is why the team at Lycoming County thoroughly vets each new purchase before making the investment.

When Lycoming County Resource Management Services needs to supplement its fleet, it turns to its local Volvo dealer based out of Harrisburg, Pennsylvania, Highway Equipment & Supply. Brian Hoffman, territory sales manager for Highway Equipment & Supply, has guided Lycoming County through multiple machine purchases using governmental buying contracts.

“We are obligated to follow certain buying regulations,” Jason Yorks, director at Lycoming County Resource Management Services, says. “If we go out to a straight bid, there’s a good chance that while we may save a few thousand dollars, in the long run, it is not cheaper if the equipment does not give you the value, service and life you expect. We are particular. We want a loader that will last a long time with good fuel efficiency. That is why we used the COSTARS cooperative purchasing program to buy the L350. Through COSTARS we can select from a list of equipment with pre-negotiated pricing through a state contracting system.”

COSTARS, while specific to Pennsylvania, is one of numerous state and federal buying contracts that are becoming an attractive alternate to the traditional bid process for government customers, Hoffman says.

“Most municipalities our dealership works with are using COSTARS, HGACBuy and NJPA (National Joint Powers Alliance). It makes it much more efficient for equipment selection, and the taxpayers have the satisfaction of knowing their money is being used responsibly,” says Hoffman.

Tom Schanz, state and provincial government sales manager for Volvo, says municipal customers should consider the benefits of state buying contracts because of the purchasing power they allow.

“COSTARS is the commonwealth of Pennsylvania’s state contract or ‘cooperative purchasing’ program. The Department of General Services administers the contract with the intention of providing a channel for procurement that can be swift while also making it simple to seek out approved vendors with vetted best pricing,” Schanz says. “There are state programs similar to COSTARS across the U.S. The state takes the lead in vetting vendors as well as their pricing so that entities throughout the state, which could be anything from municipalities to educational institutions, have the purchasing power of much larger entities.”

According to Kathy Tedone, governmental buying specialist for Volvo Construction Equipment, the company’s partners are increasingly relying on these contracts to get the most value from their purchases.

“Volvo is seeing a significant and consistent increase in the trend by our municipal partners to purchase from cooperative contracts,” Tedone says. “These contracts offer the flexibility to purchase equipment that meets their specific needs at the most competitive pricing available while saving time and money.”

While cooperative contracts are one way for the Lycoming County Landfill to save money, the site’s operators work to conserve resources whenever possible. Lycoming County has an on-site gas-to-energy plant where methane gas is repurposed from the decomposing waste, an ample resource since food waste remains the largest type of unrecovered material sent to landfills. At the site, wells are sunk into the cells to siphon off gases to an on-site facility where the methane powers four generators that produce approximately 50 million kilowatt-hours per year, preventing the equivalent of 34,000 tons of carbon dioxide emissions annually.

The Lycoming landfill has sufficient capacity to accept waste through at least 2030, and according to the site’s operators, it is working to ensure that its operations are as efficient and self-sustaining as possible in its remaining years. While the industry has come a long way since the days of the town dump, Yorks notes that preserving and maximizing landfill space will always be a priority.

“People are changing their habits; you no longer see burning barrels in backyards,” says Yorks. “Still, over 70 percent of the total volume of material we receive is MSW. While every facility across the Pennsylvania, and the United States, is seeing a drop in total waste produced, the reality is there will always be a need for a landfill.”

This article appeared in the April issue of Waste Today and was provided courtesy of Volvo Construction Equipment.

Several industry associations have partnered to study the causes and frequency of material recovery facility (MRF) fires in the U.S., including the Institute of Scrap Recycling Industries (ISRI), Washington; the Environmental Research & Education Foundation (EREF), Raleigh, North Carolina; National Waste & Recycling Association (NWRA), Arlington, Virginia; and the Solid Waste Association of North America (SWANA), Silver Spring, Maryland.

According to a news release from ISRI, the objective of the study is to compile information that summarizes the following information about fires at MRFs and scrap recycling facilities and in collection vehicles:

• frequency of MRF and scrap recycling fires annually; 

• frequency of collection vehicle fires;

• suspected causes of these fires;

• strategies and technologies used to fight these fires;

• damage caused by these fires (e.g., property, personnel injuries or death and lost operating revenue);

• preventive measures taken to minimize the potential for fires; and

• likelihood that lithium-ion batteries disposed of at MRFs or scrap yards caused a fire.

“The recycling industry is taking a proactive approach to addressing the growing concern of fires at scrap facilities,” says Robin Wiener, president of ISRI. “While this includes the implementation of new technologies, workforce safety initiatives and public outreach on proper recycling, identifying the causes of fires is the first step to finding a solution to prevent them. The survey will help identify the root causes which we can then use to better direct resources to prevent future fires.”

Key industry organizations have rallied around the issue, with the project stakeholders representing a significant portion of the scrap and recycling industry. “These fires present a major risk to worker safety. For years, NWRA has fought to improve worker safety in the waste industry,” says Darrell Smith, president and CEO of the NWRA. “This study will better inform our efforts.”

“The information gleaned from this study has the potential to save facility owners money, reduce material loss and, more importantly, increase worker safety,” adds David Biderman, executive director and CEO of SWANA. “We’re excited about the impact this research can have on the industry.”

A critical component of the study is a survey of recycling and scrap facilities, which recently went live. “Such information is critical and benefits the entire industry, as fires serve to further financial pressure on an already strained industry,” says Bryan Staley, president and CEO of EREF. 

MRF, scrap yard and collection vehicle owners and operators are encouraged to participate in the study. Click here to participate in the survey.

A group representing 115 Maine communities that send waste to Hampden-based Coastal Resources of Maine has made a loan of $1.5 million to the new facility to help it make improvements after its first six months of regular operations brought in lower-than-expected revenues, reports the Bangor Daily News.

Since starting commercial operations near the end of last year, the Coastal Resources of Maine plant has struggled to bring in revenue in part because it still doesn’t have the state permits that are necessary to resell two different products — plastic fuel briquettes and cellulose pulp — that it makes from the waste it receives.

The facility hopes to receive those permits soon, according to the article, but the delay has forced it to pay fees to landfill those products rather than receive income from selling them, according to Director of Community Services Shelby Wright. In addition, the company has struggled to sell some baled recycled goods following China’s waste import ban in 2018.

The company is now seeking to borrow more than $10 million to help pay for a series of upgrades it has identified as necessary, Wright tells the paper. In addition to making improvements to its machinery to better handle the waste it receives, the plant needs to stock more belts, motors and other supplies needed for maintenance and hire more workers. It now employs 52 people and a few temporary workers.

“We’ve been operational since November and gotten a taste of how everything is,” Wright says in the article. “We’ve discovered things that need tweaking and that we need to redesign. We’re starting to get our heads around a solid maintenance schedule. It’s just to fine-tune the intricacies of what is a very complicated line to produce.”

Coastal Resources of Maine will also use those borrowed funds to pay back the $1.5 million loan it has received from the Municipal Review Committee, the organization that represents the waste disposal interests of the 115 Maine communities stretching from the midcoast to Aroostook County.

In February, the committee’s board agreed to grant the “short-term loan” out of an existing account meant to address contingencies in the Hampden plant’s operations, according to Executive Director Michael Carroll. The funds are expected to be repaid by mid-June., the Bangor Daily News reports.