Casella Waste Systems, Inc. (NASDAQ: CWST) saw revenue rise 31.4% in the second quarter of 2022 from a year earlier as prices for recycled raw materials rose.
The Vermont-based waste management service provider also cited the impact of acquisition turnover; positive pricing of collection and disposal; higher solid waste cost recovery fees; higher solid waste volumes for a positive Q2 2022.
“Our performance in the quarter is the result of our efforts in many areas, including strong operational initiatives focused on reducing our service costs through productivity improvements and increased automation,” commented John W. Casella, President and CEO. “At the same time, our fuel recovery rates and fees are working well to offset inflation. In fact, we fully offset higher fuel costs during the quarter and our continued execution against our growth.”
While the company has done a “great job of overcoming the pressures” through investments in operational efficiency programs to further reduce costs, it aims to pass on increased operating costs to its customer base through our pricing programs and our collection costs.
Early adjustment of pricing programs contributed to a 6.9% increase in solid waste price in the second quarter, which was driven by a 7.7% increase in collection price and growth in 5.7% elimination compared to the previous year.
Revenue for the quarter was $283.7 million, versus $215 million, or 31.4%, as solid waste revenue increased 26.4% year-over-year (YOY).
The company posted net income of $17.8 million for the second quarter, an increase of 51% over 2021. Net cash provided by operating activities was $92.3 million. dollars, up $13.2 million, or 16.8%, from the previous year.
Landfill operations for the quarter showed positive increases in volume and price after a “difficult winter,” according to Casella. Average landfill price per ton for the second quarter increased 6%. Citing a strong economy in the North East, he said the company expects volumes to remain positive throughout 2022.
As the first six months of 2022 draw to a close, Casella Waste Systems has acquired 11 businesses so far this year, generating nearly $47 million in annualized revenue. In addition to focusing on acquisition activity, the company is working to create a “balance model” with investments in its Environmental Solutions segment for “appropriate financial return.”
Casella discussed investments focused on environmental stewardship and sustainability, first noting the ongoing update process at its Boston Zero-Sort recycling facility that includes new equipment to drive automation with the robotic technology. The company expects the MRF to be fully operational with upgrades in the first quarter of 2023.
“This is an investment of nearly $20 million that will increase throughput, improve product quality and improve operational efficiencies, which positions us well to serve the needs of the Greater Boston market in recycling point of view,” he commented.
The company also recently installed new robotics and sorting capacity that is an Ontario County recycling facility, with early results showing “strong efficiency gains.”
After strong operational execution in the first half of the year, Casella Waste Solutions has updated its guidance ranges for fiscal year 2022 for the second time.
“These guidance ranges assume a stable economic environment for the remainder of the year, including the current historically high inflationary environment,” Casella said. drive year-over-year margin expansion. »
Revenue: $283.7 million, up 31.4% year-over-year
Net revenue: $17.8 million, up 51% from 2021
Adjusted EBITDA: $68.5 million, up 31.4%
Net cash flow generated by operating activities: $92.3 million, up 16.8%
Adjusted Free Cash Flow: $46.2 million, up 22.9%
Tips for the whole year
Revenue: $1.035 billion – $1.050 billion (from $1.005 billion to $1.020 billion)
Net revenue: $50 million – $54 million (from $48 million to $52 million);
Adjusted EBITDA: $238 million and $242 million (from $232 million to $236 million);
Net cash flow generated by operating activities: $208m – $212m (from $204m to $208m)
Adjusted Free Cash Flow: $106 million – $110 million (from $104 million to $108 million).