Casella Waste Systems reports revenue growth for Q3 2018

Casella Waste Systems Inc., a regional solid waste, recycling and resource management services company based in Rutland, Vermont, has reported its financial results for the three-month period ended Sept. 30, 2018.

Among the highlights for the quarter, according to Casella Waste Systems, was revenue growth of 7.8 percent, or 12.6 million, compared with the third quarter of 2017, for a total revenue of $172.8 million for the quarter.

Overall solid waste pricing for the quarter increased 4.8 percent, driven by strong collection pricing (up 5.7 percent) and robust landfilling pricing (up 4.1 percent) from the same period in 2017.

Casella Waste Systems reports net income of $22.3 million for the quarter, an increase of $10.2 million from the same period in 2017. In addition, adjusted net income was $13.4 million for the quarter, an increase of $0.3 million from the same period in 2017.

Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was $42.4 million for the quarter, up $2.9 million, or 7.3 percent, from the same period in 2017.

Net cash provided by operating activities was $89.9 million year to date, an increase of $10.8 million, or 13.7 percent, from the same period in 2017, according to the company.

Normalized free cash flow was $37.3 million year to date, which is $2.9 million, or 8.5 percent, more than in the third quarter of 2017.

Casella Waste Systems says it has acquired approximately $70 million of annualized revenue year to date and is on track to exceed its target range for 2018.

“We had another strong operational quarter, as we continued to execute well against our key strategies as part of our 2021 plan,” says John W. Casella, chairman and CEO of Casella Waste Systems. “We remain focused on driving Normalized Free Cash Flow growth by increasing landfill returns, improving collection profitability, creating incremental value through resource solutions, using technology to drive profitable growth and efficiencies, and efficiently allocating capital for strategic growth.”

Casella says outperformance in the company’s solid waste, customer solutions and organics operations “more than offset the significant commodity pricing headwinds in its recycling business.”

“Our disciplined solid waste pricing programs continue to drive significant value, with collection pricing up 5.7 percent and landfill pricing up 4.1 percent year-over-year in the third quarter,” Casella adds. “Solid waste volumes were down 1 percent year-over-year in the third quarter, with 0.7 percent of the decline resulting from a fire related business interruption at a transfer station, and the remainder associated with our disciplined pricing strategy that is focused on balancing volume growth with higher pricing.”

The company says it continues growing its acquisition pipeline, including two acquisitions that closed Nov. 1.

“We are focused on acquiring well run businesses in strategic markets that will drive additional internalization to our landfills and operating synergies,” Casella says. “We are also focused on more effectively optimizing waste placement around the northeast as the ever-tightening disposal market is creating additional opportunity to source new volumes at higher prices. We believe that there is additional opportunity to drive cash flow growth across our footprint through strategic growth.”

The third quarter included recovery of a $10 million Southbridge Landfill environmental insurance settlement, partially offset by $0.5 million of legal expenses associated with the Southbridge Landfill closure, Casella Waste Systems reports. The same period in 2017 included a $.08 million Southbridge Landfill closure charge.

“Given the continued strength in our solid waste, organics and customer solutions operations combined with our success advancing acquisition activity, we have increased our revenue, adjusted EBITDA and normalized free cash flow guidance ranges for the fiscal year ending Dec. 31, 2018,” Casella says. “Recycling commodity prices stabilized early in the third quarter and began to modestly improve throughout the quarter.  We have forecasted commodity prices to stay flat at the current low levels for the remainder of 2018.”

The estimated ranges are:

• revenue between $642 million and $652 million (increased from a range of $630 million to $640 million);
• adjusted EBITDA between $137 million and $140 million; and
• normalized free cash flow between $44 million and $47 million.