Casella Waste Systems, Rutland, Vermont, has reported revenue growth in the quarter ending March 31, 2016, that nonetheless yielded a $7.6 million net loss for the solid waste and recycling company.
Casella says its first quarter 2016 revenue of $125.4 million was up by $8.9 million, or 7.6 percent, from the same period in 2015. Its net loss for the quarter of $7.6 million was down slightly from the $8 million lost in the first quarter of 2015.
Chairman and CEO John Casella cites the recycling markets as an ongoing reason for red ink. “Over the last year, we have worked diligently to reshape our recycling sales model in the face of rapidly declining recycling commodity prices, and the changes that we made are working extremely well,” he says. “In fact, during the first quarter we improved operating income by $1.1 million year-over-year in our recycling business, despite a 20 percent drop in our average commodity revenue per ton. We overcame lower recycling commodity prices and achieved this improvement through a combination of our Sustainability Recycling Adjustment (SRA) fee applied to residential and commercial hauling customers, lower rebates or higher tipping fees to recycling processing customers and efforts to reduce operating costs at our materials processing facilities.”
Casella adds, “Our solid results in the first quarter were driven by continued execution against our key management strategies, a mild winter in the Northeast, and selective strengthening of the regional economy. I am very pleased with our financial and operational performance during the quarter, and I believe that we are well positioned to continue to execute in fiscal year 2016 and beyond.”
In the overall waste hauling and disposal sector, he says, “Our efforts to drive pricing in the collection and disposal lines of business continued to gain strength through the first quarter. Overall solid waste pricing was up 4.7 percent, with particular strength in the collection line-of-business, where we experienced our highest pricing growth in over 10 years at 6.7 percent. Adding to this success, we advanced disposal pricing 2.8 percent in our Eastern Region as we further capitalized on the tightening disposal markets across this market area. These strong pricing gains were complemented by improvements from our operating efficiency programs with our fleet and routing programs driving lower costs.”
Regarding upcoming financial quarters, the company has “reaffirmed its 2016 guidance for the year ending Dec. 31, 2016, by estimating results in the following ranges:
• revenue between $550 million and $560 million;
• adjusted EBITDA between $111 million and $115 million; and
• free Cash Flow between $20 million and $24 million.