Texas Pride 2.0

Houston-based Texas Pride Disposal has had a busy spring. Texas Pride founder and CEO Kevin Atkinson says the firm’s recapitalization in partnership with NMS Capital, New York City, announced in late April, will mark a milestone in the hauling company’s history.

“The goal is to try to grow the company and try to increase its revenue by five times in the next five years,” Atkinson says.

For years, the company has operated out of facilities on the north and south side of Houston, which Atkinson says are garage and maintenance spaces, but that’s changing this spring.

“We’re putting in a 3,600-square-foot addition,” he says. “We’re doing about three-quarters of a million dollars’ worth of work to the facility itself, the parking lot, shop improvements, and that’s all coming down the pipeline at one time.”

In addition to planning the addition at the Houston south location, the partnership with NMS has enabled Atkinson to bring on new leaders to the company, which he says will allow him to plan longer term.

Starting small

Atkinson began his career in the waste industry in management roles at WCA Waste Corp. After WCA was acquired by Australia-based Macquarie Group in 2013, he says he and Jim Larson created Texas Pride, buying up the assets of Rosenberg, Texas-based Fort Bend Garbage, which included 1,200 customers and several trucks.

“I joke that we had two-and-a-half trucks,” he says. “We had two 2010 Freightliners and one 1991 GMC. On the first day, we went out to look at the trucks, and [the GMC] was rusting outside its body.”

For about a year, Atkinson says he was operating with three trucks and running some routes himself.

“I was going out every Wednesday and Saturday to service two small communities because we could not afford to pay our guys to collect those routes,” he says.

After securing a 900-home route in early 2015, Atkinson says the business quickly improved.

The Texas Pride fleet had expanded to more than 100 trucks prior to this spring, when Atkinson says the company acquired Texas Dumpster, which operates in the Austin, Midland and San Antonio areas of Texas, and around Phoenix, where it has a port-a-potty operation.

“That gives us a pretty healthy footprint,” he says, adding that the Texas Dumpster business includes 60 routes per day and 70 trucks.

The acquisition of Texas Dumpster, made possible with NMS Capital’s help, brings Texas Pride’s total fleet to approximately 200 trucks, Atkinson adds, while its workforce has increased to about 400 employees.

Not having transfer stations and landfills of its own has not been a handicap for the company so far, Atkinson says.

“Houston has been a good place to do business because there are so many disposal options here. The four big guys all have MSW [municipal solid waste] capacity,” he says. “Collectively, there are a dozen sites to take our MSW to. We’ve always tried to capitalize on the closest facility, but Waste Connections, Waste Management [WM], GFL—they all own a network of disposal sites across the city, which helps with that travel time. But it also helps keep the market competitive, as well.”

Atkinson says Texas Pride’s business prior to the recapitalization was 85 percent residential, 5 percent roll-off and 10 percent commercial.

“We call it Texas Pride 2.0 since the recapitalization,” he says. “When you look prerecapitalization, we grew organically, essentially going out bidding on contracts, winning as we did so, and trying to go out and chase commercial as we could. We were limited on capital.”

With Texas Pride’s acquisition of Texas Dumpster, Atkinson says the company will add collection services to its offerings in Austin, Midland and San Antonio, bringing Texas Pride’s longtime experience in residential collection to Texas Dumpster’s service areas and bringing roll-off services to the Houston area.

“I think with what we just acquired, we want to be more diversified in those markets,” he says. “Those are roll-off and portalet right now, so I think we’re looking at what residential and commercial looks like in those markets, as well.”

Atkinson says he would like to expand into other regions of Texas, too, which is more viable with the financial backing from NMS.

Picking the right truck

Expanding the fleet was one of Atkinson’s first tasks after establishing Texas Pride in 2013. He says he was familiar with McNeilus trucks from his work with WCA Corp.; however, that wasn’t the route he decided to take at Texas Pride.

Although Chattanooga, Tennessee-based Heil Environmental had high quotes, Atkinson says Jeff Davis with Houston-based Heil of Texas worked with him on price and earned his business. More importantly, he kept the price consistent for Texas Pride over the years.

“Ever since then, they’ve been very consistent on their pricing for us,” he says. “They’ve made their service second to none for us, and I think he’s really got a strong support system on equipment.”

Atkinson says Davis also has been honest about what repairs require dealer services to intervene and which do not.

“It’s pricing and coming back to us and saying, ‘Hey we could do this. You could also do this, as well, and save quite a bit of money if you did it in-house,’” he says.

“The goal is to try to grow the company and try to increase its revenue five times in the next five years.” – Kevin Atkinson, founder and CEO, Texas Pride Disposal

Atkinson says the dealership also visits Texas Pride’s facilities to check its trucks.

“They’ve periodically walked the fleet—just really above and beyond in my opinion,” he says. “You buy that truck, but it’s that relationship that goes along with that that’s important.”

With the recapitalization, Atkinson says he’s planning to modernize his fleet by opting for more automated trucks.

“We previously never looked at automation just because of [the] capital [needed] … I could buy three rear loaders for the price of two side loaders, and now I think that script has been flipped,” he says. “We’ve won a few automated contracts here in the Houston area, and I think we’ll continue to try to push that both with new customers and our existing customers where it makes sense.”

Atkinson says one of the things he takes most pride in is offering flexibility for the company’s customers.

“We’re not opposed to all rear load, all automated or a combination of both,” he says. “We’ve always built this based on it being your program. We’re here to help you build a program that fits your needs, and so we put those options on the table as an a la carte setup and let them choose what they want.”

COVID-19 and a buyout

After launching Texas Pride, Aktinson says the firm was “really running and gunning there for a while.”

But he adds that the COVID-19 pandemic hit at an especially awkward time for the company.

“2020 hit, but on top of that, I bought my partner out, and buying my partner out really hampered my cash flow,” he says. His partner at the time, Jerry Kruszka, was a mentor and a 25-year veteran of WM.

With all the business challenges associated with the pandemic, it was not an ideal time to be short of cash. In addition, Texas experienced a bad freeze in 2021, which exacerbated supply chain problems and the labor shortage. “We had the freeze down here and saw our volume jump by 70 percent,” he says. “We picked up 35,000 tons in February and then 54,000 tons in March.”

Atkinson says Texas haulers faced challenges during the pandemic given the freeze and labor shortage. He adds that issues were magnified for Texas Pride because of its tight balance sheet and cash flow. “That’s really the reason that we were looking for a capital partner, and that was almost a two-year search for us.”

The investment from NMS gave Texas Pride the ability to expand facilities and its service footprint, as well as add more leaders within the company.

“It was really my controller and I that … tried to keep this thing running the last few years, and instantaneously with NMS coming on, we brought on a CFO [chief financial officer] and COO [chief operating officer], and we’ve brought on a much stronger fleet manager, as well,” he says.

In announcing the recapitalization, NMS says Texas Pride Disposal is its second investment in environmental services, an area the firm entered in 2021.

“After nearly two years of searching for the right MSW company to acquire, we were fortunate to find two high-quality providers to partner with in one of the largest and fastest-growing states in the U.S.,” says Daniel Schwartz, managing director at NMS, in the April press release about the recapitalization. “This transaction will provide the combined company with the capital required to support new and existing customer growth and strategic acquisitions across all business lines, as well as an experienced team to lead Texas Pride into the future,” he adds.

In May, Atkinson announced the appointment of COO Tony Cincotta and CFO Mark Schifani.

Schifani and Cincotta have backgrounds in the waste and recycling industry. Schifani comes to Texas Pride from WIN Waste, Portsmouth, New Hampshire, where he was senior vice president of finance, and Cincotta was a general manager for Republic Services, Phoenix.

Bringing them on has enabled Atkinson to focus on “the 10,000-foot view” of the company and long-term planning rather than getting bogged down by day-to-day operational issues.

Also joining Texas Pride Disposal is Chuck Casalinova, an industry veteran with previous experience at WCA, who is working with NMS on its environmental services initiatives. He will serve as the company’s executive chairman.

Jay Walker was hired as a fleet manager, and Atkinson says he plans to hire Jay Kline as a general manager to oversee the company’s fleet operations in June.

David Ewell is consulting with Texas Pride on business development.

Atkinson says he’s explained his expectations to Cincotta and Schifani and plans to give them “the space to do what they want to do and how they want to do it.

“To me, that’s critical. I think creativity, just the ability to take ownership over what they’re creating, is important to me,” he says. “Coming into an organization that truthfully wasn’t running to its full potential when they stepped into it, there was some low-hanging fruit there. It’s exciting for them; it’s exciting for me, truthfully.”

The author is the managing editor of Waste Today and can be reached at bgaetjens@gie.net.