Casella Waste Systems Inc., Rutland, Vermont, reported its Q2 results on July 29.
Highlights for period included:
- Revenues were $215.9 million for the quarter, up $27.1 million (14.4 percent) from the same period in 2020.
- Overall solid waste pricing for the quarter was up 4 percent from the same period in 2020, driven by collection pricing (up 4.2 percent) and landfill pricing (up 4.3 percent).
- Net income was $11.8 million for the quarter, down $300,000 (2.7 percent) from the same period in 2020. Provision for income taxes was $5.4 million for the quarter, up $5.1 million from the same period in 2020.
- Adjusted EBITDA was $52.1 million for the quarter, up $8.1 million (18.5 percent) from the same period in 2020.
- Net income as a percentage of revenues was 5.5 percent for the quarter, down 96 basis points from the same period in 2020. Adjusted EBITDA as a percentage of revenues was 24.1 percent for the quarter, up 84 basis points from the same period in 2020.
- Net cash provided by operating activities was $79 million for the year-to-date period, up $16.5 million (26.4 percent) from the same period in 2020.
- Adjusted free cash flow was $39.8 million for the year-to-date period, up $12.3 million (44.8 percent) from the same period in 2020.
- The company purchased Willimantic Waste Paper Co. Inc., an integrated solid waste provider based in Willimantic, Connecticut, on July 26. Willimantic has annualized revenues of approximately $62 million.
"We had another strong operational quarter, as we continued to execute well against our long-term strategic plan,” John Casella, chairman and CEO of Casella Waste Systems Inc., says. “As a result, we increased adjusted EBITDA by 18.5 percent and adjusted EBITDA margins by 84 basis points year-over-year in the quarter, and we increased year-to-date adjusted free cash flow by 44.8 percent year-over-year.
“Our team did a great job controlling costs while volumes and services continued to ramp back online during the quarter as commercial customers added services, construction activity increased, and overall economic activity rebounded across our markets. Given these positive economic trends, solid waste volumes were up 7.1 percent year-over-year, while we advanced solid waste pricing by 4 percent with strength in both the collection and disposal lines of business. We expect volumes to continue to rebound through the remainder of the year, with year-over-year gains moderating through the remainder of the year.
“[On July 26], we completed the acquisition of Willimantic, an integrated solid waste collection, transfer and recycling business with operations in eastern Connecticut. This acquisition expands our operating footprint and provides an exciting new platform for future growth. With the acquisition of Willimantic, we have completed five acquisitions year-to-date with approximately $67 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 with opportunistic acquisitions.”
Fiscal year 2021 outlook
“Given our solid execution year to date, the expected contribution of acquisitions already completed this year, and our increased visibility of economic trends, we are updating our fiscal year 2021 guidance ranges that were first announced in mid-February,” Casella says. “These guidance ranges assume a stable economic environment continuing through the remainder of the year with only a modest further rebound in solid waste volumes.”
The company raised guidance for the second time in fiscal year 2021 by estimating results in the following ranges (as compared to the fiscal year 2021 guidance ranges as updated on April 29, 2021):
- Revenues between $850 million and $860 million (as compared to $815 million to $830 million guidance ranges as updated on April 29;
- Net income between $35 million and $39 million (as compared to $33 million to $37 million);
- Adjusted EBITDA between $195 million and $199 million (as compared to $185 million and $189 million);
- Net cash provided by operating activities between $158 million and $162 million (as compared to $150 million and $154 million); and
- Adjusted free cash flow between $79 million and $83 million (as compared to $76 million and $80 million).