Casella announces Q3 results

Casella Waste Systems Inc., Rutland, Vermont, a regional solid waste, recycling and resource management services company, has reported its financial results for the three and nine month period ending on Sept. 30.

Highlights for the quarter included:

• Revenues were $202.7 million for the quarter, up $4.1 million, or up 2.1 percent, from the same period in 2019.
• Overall solid waste pricing for the quarter was up 4.0 percent, with collection pricing up 3.7 percent and landfill pricing up 6.9 percent, from the same period in 2019.
• Net income was $15.1 million for the quarter, up $2.7 million, or up 22.0 percent, from the same period in 2019.
• Adjusted EBITDA, a non-GAAP measure, was $51.3 million for the quarter, up $2.8 million, or up 5.9 percent, from the same period in 2019.

“I remain extremely proud of our 2,500 dedicated employees, especially our frontline team members who have worked hard during this challenging time to effectively service our customers while maintaining our high safety and environmental standards,” says John W. Casella, chairman and CEO of Casella. “As an essential services provider, we have continued to operate effectively through this period and our number one priority has been, and will continue to be, keeping our people and the communities where we operate safe and healthy.” 

Q3 results

According to the company, solid waste volumes were down 8.4 percent year-over-year in the quarter, as certain customers sustained negative business impacts from the COVID-19 pandemic. Volume declines continued to moderate throughout the quarter as various commercial customers reopened or increased services, construction projects resumed and overall building activity increased. 

Meanwhile, overall economic activity rebounded across Casella’s mainly secondary and rural markets in the northeast. Given these sequential improvements, by September the company’s solid waste volumes were down 4.8 percent year-over-year for the month. 

“Despite these volume headwinds and roughly $1.0 million of COVID-19 specific costs during the third quarter, we increased Adjusted EBITDA by $2.8 million and improved margins in the quarter,” Casella says. “This improvement was mainly due to our continued flexing of variable costs such as labor, overtime and certain general and administrative costs; advancing pricing in excess of inflation; the roll-over impact of acquisitions completed in the last 12 months; and strong execution by our Resource Solutions team.” 

With revenues increasing by $4.1 million from the year prior during this quarter, the company pays credit to positive collection and disposal pricing; the roll-over impact from acquisitions; higher resource solutions volumes; and higher recycling commodity prices, which were partially offset by lower solid waste volumes primarily due to the negative economic impacts of the COVID-19 pandemic.

2020 outlook

Given the company’s strong execution during the third quarter, combined with increased visibility of the negative volume and cost impacts of the COVID-19 pandemic, Casella says they will be raising financial guidance ranges for fiscal year 2020. 

“There are still many variables outside of our control, such as new waves of COVID-19, additional stay-at-home orders and impacts on the economy as the federal stimulus programs run their course,” he says. “However, our team has remained nimble in this rapidly changing environment and continues to flex operating costs and drive operating efficiencies to offset lower volumes or other headwinds.”   

He adds, “Our guidance ranges assume a modestly declining to stable economic environment for the remainder of the year. And the guidance ranges do not contemplate a severe relapse of the COVID-19 pandemic or new stay-at-home orders, which may negatively impact commercial and general economic activity in our markets through the remainder of 2020."