Casella reports revenue increase for Q2

Casella Waste Systems Inc., Rutland, Vermont, has shared its financial results for the second quarter of 2020. Revenues were $188.8 million for the quarter, up $1.3 million or 0.7 percent, from the same period in 2019.

“The last several months have been a challenging time, and I am extremely proud of our 2,500 dedicated employees, especially our frontline team members who have worked hard to effectively service our customers while meeting our high safety and environmental standards,” Casella Chairman and CEO John W. Casella says. “Our No.1 priority has been, and will continue to be, keeping our people and the communities where we operate safe and healthy. We are accomplishing this by strictly adhering to CDC (Centers for Disease Control and Prevention) recommendations and state executive orders, utilizing appropriate personal protective equipment, following exposure reduction plans for each frontline role and increasing disinfectant procedures."

Q2 highlights

• Overall solid waste pricing for the quarter was up 4.4 percent, with collection pricing up 4.3 percent, and landfill pricing up 6.2 percent, from the same period in 2019.
• Net income was $12.1 million for the quarter, up $0.2 million or 1.7 percent, from the same period in 2019.
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization), a non-GAAP (generally accepted accounting principles)  measure, was $44 million for the quarter, up $3.6 million or 8.9 percent, from the same period in 2019.
• Net cash provided by operating activities was $62.5 million for the year-to-date period, up $24.2 million or 63.4 percent, from the same period in 2019.
  

“We entered the COVID-19 crisis as a strong company with an experienced and well-balanced team, excellent culture and core values, a solid balance sheet with sufficient liquidity, robust cash flow generation, effective risk management programs, stable business processes and consistent strategic execution,” Casella says. “As an essential service provider, we have continued to operate effectively through this period and have not experienced significant revenue declines, with approximately 85 percent of our revenues from stable recurring sources.

“Effective Jan. 1, 2020, we completed the realignment of our recycling, organics and customer solutions groups into the newly formed Resource Solutions segment,” Casella says. “This is an important long-term strategic move to ensure that our resource-oriented teams are well-aligned as they help customers achieve their sustainability goals. During the second quarter, our team did a great job accelerating our mid-term plans to leverage cost synergies across operations, sales and the back-office.”

2020 outlook

Casella says, “Our guidance ranges assume a stable to modestly improving 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 shutting down commercial and economic activity again through the remainder of 2020 in our markets."

The company provided guidance for the fiscal year by estimating the following:

• revenue between $755 million and $770 million (as compared with $743.3 million in the fiscal year ended Dec. 31, 2019);
• net income between $23 million and $28 million (as compared with $31.7 million in fiscal year 2019);
• adjusted EBITDA of between $158 million and $163 million (as compared with $156.5 million in fiscal year 2019);
• net cash provided by operating activities of between $122 million and $126 million (as compared with $116.8 million in fiscal year 2019); and
• adjusted free cash flow between $53 million and $57 million (as compared with $55.5 million in fiscal year 2019).
  

“We experienced a rapid recovery in business activity from late April through mid-June as the stay-at-home orders were first lifted; however, this rebound has flattened through July and we do not expect our normal seasonal business uptick from the second to third quarter," Casella says. "Further, we expect certain operating expenses to increase through the remainder of the year, such as higher container weights in the commercial line-of-business, lower operating efficiencies due to traffic increases and higher fuel costs.”