Casella’s Q4 earnings exceed expectations, show industry recovery

Casella Waste Systems Inc., Rutland, Vermont, has reported its financial results for the fourth quarter ending Dec. 31, 2020.

For the quarter, revenues were $200.2 million, up $6.6 million, or up 3.4 percent, from the same period in 2019. The company credits this revenue growth to positive collection and disposal pricing, the roll-over impact from acquisitions, higher resource solutions volumes and higher recycling commodity prices. However, these are partially offset by lower fuel surcharge and other fees along with lower solid waste volumes primarily due to the negative economic impacts of the COVID-19 pandemic.

Net income was $62.9 million for the quarter, or $1.24 per diluted common share, up $53.9 million, or up 594.0 percent, as compared to net income of $9.1 million, or $0.19 per diluted common share, for the same period in 2019.

The quarter included $0.3 million of expense from acquisition activities, $0.8 million of legal and other expenses associated with closure of the company’s landfill in Southbridge, Massachusetts, and a $55.0 million non-recurring benefit to income taxes due to the reversal of a valuation allowance on the majority of net operating loss carryforwards and other deferred tax assets.

“Despite the negative volume and cost impacts of the COVID-19 pandemic during 2020, we still increased adjusted EBITDA by 9.5 percent and adjusted free cash flow by 24.7 percent year-over-year,” says John W. Casella, chairman and CEO of Casella Waste Systems. “This is a true testament to the hard work and dedication of our team, the resiliency of our business model, and our asset positioning in the disposal capacity constrained northeast market that allowed us to advance positive pricing. Systems enhancements over the last year have improved our ability to analyze and respond to key sales trends and operational metrics in a more responsive and intelligent manner.” 

Casella adds that the company has continued to execute well against our long-term growth strategy, and year-to-date in 2021 we have acquired one business with approximately $4 million of annualized revenues. “Our acquisition and development pipeline remains robust, and we believe that there is substantial opportunity to drive additional cash flow growth across our footprint with opportunistic acquisitions,” he says.

Adjusted net income was $8.8 million for the quarter, or $0.17 adjusted diluted earnings per common share, which was down $1.4 million, or 14.2 percent, when compared to the same period in 2019. Operating income was $14.2 million for the quarter, down 2.7 percent from the same period in 2019. Adjusted EBITDA was $42.6 million for the quarter, up $1.5 million, or up 3.7 percent, from the same period in 2019.

For fiscal year 2020, revenues were $774.6 million, up $31.3 million, from fiscal year 2019. Net income was $91.1 million, or $1.86 per diluted common share, as compared to net income of $31.7 million, or $0.66 per diluted common share, for fiscal year 2019. Adjusted net income was $40.8 million, or $0.83 adjusted diluted earnings per common share, for fiscal year 2020, as compared to $40.6 million, or $0.85 adjusted diluted earnings per common share, for fiscal year 2019.

Operating income was $59.3 million for fiscal year 2020, up $6.2 million from fiscal year 2019. Adjusted operating income was $65.7 million for fiscal year 2020, up $3.7 million from fiscal year 2019. Adjusted EBITDA was $171.4 million for fiscal year 2020, up $14.9 million from fiscal year 2019.

Net cash provided by operating activities was $139.9 million for fiscal year 2020, as compared to $116.8 million for fiscal year 2019. Adjusted free cash flow was $69.1 million for fiscal year 2020, as compared to $55.5 million for fiscal year 2019.