Waste Connections (WCN) 29 Apr 212021 Q1 Earnings call transcript

Company Profile

Participants

Worthing Jackman	President and Chief Executive Officer
Mary Anne Whitney	Chief Financial Officer
Walter Spracklin	RBC Capital Markets
Kevin Chiang	CIBC
Jeff Goldstein	Morgan Stanley
Chris Murray	ATB Capital Markets
Tyler Brown	Raymond James
Adam Bubes	Goldman Sachs
Michael Hoffman	Stifel
Ryan Gunning	Jefferies
Stephanie Yee	JPMorgan
Noah Kaye	Oppenheimer

Call transcript

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Operator

Greetings, and welcome to the Waste Connections First Quarter 2021 Earnings Conference Call.

During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded, on Thursday, April 29, 2021. I would now like to turn the conference over to Worthing Jackman, President and CEO. ahead. go Please

Worthing Jackman

the operator, everyone you, first morning. like Whitney, outlook I’d XXXX morning joined Perfect. Mary by this and conference welcome Anne for detailed a to and CFO. our quarter. call to I’m results this Thank our provide good second to quarter discuss

for and bolstered release, results values recovery drove higher-than-expected strong first quarter our points As waste basis pricing adjusted growth, resource noted earnings retention, in year-over-year. tailwinds accelerating up and QX, EBITDA increased pricing an XXXX. improving solid waste margin outlook and XX solid points by up strong solid These waste volumes drove basis XX better-than-expected in

than activity Adjusted free As deferred our shortly, year-over-year year. in minimum outlook XXX Mary swings. waste points the and comp will $XXX positioning from margin for was flow exceed basis a the discuss to lower full E&P drags period, stock offset us primarily million QX, market-related waste margin million $XXX Anne more cash solid improvement of in comfortably

employees waste improving families waste in Recovered pandemic macro but the commitment our exited anniversary values positioning quarter, our their to us local response for X.X% we also importantly, solid pandemic. to COVID-XX to are and as by volumes economies up knew of COVID-XX volume plus trends in and the well-positioned in continue quarter. support a us abate, impacts we activity leave March unwavering. accelerated the with operating we year-over-year business COVID-XX-related will of our to performance comp, spite our the and and reopen, We improve. strong onset that are double-digit the first the as of most financial Solid second encouraged growth to price as tough differentiated continued commodity our

let items. we forward-looking our over the other disclaimer Mary housekeeping and more into much call turn Before Anne get me detail, to for

Mary Anne Whitney

and during Act in Litigation discussion applicable the made could Exchange call in made that Safe from our today’s could forward-looking regulatory of cause Waste in greater Securities within including or due morning. similar the in risks are Canadian with to to statement the XXXX, XX Worthing, in to Commission disclosed uncertainties. securities detail the differ provisions you, The forward-looking Harbor various earnings the Canada. laws. results Reform and commissions pursuant statements of Factors cautionary includes and those release actual materially statements Connections of Securities securities differ Private such Thank in results included Actual April and good and U.S. filings meaning information forward-looking authorities both U.S. the

could after forward-looking which are reliance to in we revise You or change not immaterial, statements on not we risks be to currently adverse have that reflect additional We circumstances that any no or on impact statements update believe order an events place should our business. are of presently today’s may date. there may forward-looking undue or aware make which as commitment

share may performance to per I uses earnings certain Waste for the free measures as will on releases will such to monitor a of the a calculate of call measures Please measures. financial turn most non-GAAP non-GAAP comparable to measures net now GAAP attributable and and operations. differently. the these our Connections basis to EBITDA, call, discuss over Management ongoing we evaluate the our reconciliation back non-GAAP companies such to Worthing. adjusted measures and On Other flow. both income refer diluted non-GAAP dollar cash adjusted adjusted

Worthing Jackman

of of the material persisted XXX our exclusive plus when and period year-over-year the to last start our points our X.X%, Thank that you, the X.X% more the in the comparisons was in In first about the expectations, impact of to volume X% a basis Mary basis spite growth from collectively waste outlook. fuel above XX mid-March exceeded Anne. onset XXXX pandemic western up in Core solid tough strong to and year our the region pricing of quarter, up both points of in from results. surcharges mostly X.X% QX to range our in competitive QX in price began regions. pricing ranged until

as Our as the our recovered. revenue, on volumes execution the volumes pricing pandemic reflect quality strength declined of focus of market continues during our both differentiation and and to model of the consistency is in negative faster-than-expected and reopened. increase at X.X% as volume the sequentially QX. growth to recovery economies to Reported expected to in above activity X.X% due basis was growth better-than-expected local Pricing QX points in XX have

volumes western in estimated our February volumes many the leap notably points improving which similar and by QX, the in eastern for severe weather driven while most region, quarter to day from during winter the normalizing volume X.X% expected, and were up and in Volumes southern trends QX in an accelerated XXX the for continue markets, extra impacted QX impacts in operations strongest by sequential improved improvements end. As Adjusting year were weather-related XXXX, was on our sequentially region. affecting regions be mostly to quarter. in central year-over-year QX, our into basis

is inflecting landfill and volume QX. in commercial off roll to and March, waste turned X% X.X% growth positive volumes, Solid up in expected exceed activity revenue while

a points XXX points each from X% tons by first C&D up MSW pull improvement Looking X% in up at XXX revenue due March year-over-year, improvements and points basis tons. basis per sequentially year-over-year In tons by March landfill MSW again with same-store QX, revenue in were down in Landfill but in X% with sequential up special up along X%. C&D down X% pulls quarter. up quarter March, with up tons improved X% XXX year-over-year about in year-over-year. waste on prior sequential continued revenue year-over-year both the pulls increased collection were once we Roll-off improved to basis to Commercial strength X%. saw up of X%, per basis, with X%. about the to sequentially sequentially lines all results business day tons, year-over-year and

and Looking that recover energy at landfill or from commodities, renewable credits, gas recycled QX RINS. volumes commodities, is

collectively they were for XX% RINs. or in above QX, Prices tailwind high of recycled year-over-year margin higher commodities about values due And end acquisitions, the a outlook. XXX for to ton of Resulting activity. period the comparison both corrugated basis with almost RINs containers, X.XX Excluding year, first expectations. in points. in old and revenue OCC, per period. about about our in up be $XXX averaged $XX.X the and X.XX. QX the in in finally, reported our quarter, on E&P XX% with We stayed waste of of to E&P QX million down waste waste mostly should E&P the revenue to line range in for the toughest year-over-year And our

closed we’ve small of four Looking a at handful tuck-ins acquisition states. Year-to-date, in activity.

such encouraged another cadence the the of outsized suggest are year which potential dialogue We acquisition and of the by of for both of high-quality acquisitions, activity. potential

for maintain pipeline above-average shares strong increase held given Our have expect for growth only annual with acquisition also and reopen in strong dialogue practice of been in transition that undertake these we and family-owned in with year-to-date, our us, continuing businesses, end, the to economies already of established tax-driven terms recovery lineage percentage not in of capital active of repurchased our growth shareholders. we buybacks we the when typical companies level almost a is seller like activity, no potential double-digit feel both remain to surprise would potential We privately share organic for record per the but return decade-long well-positioned outstanding as the which levels activity. share To of X% review dividend discussions October.

Mary up to Q&A. the to pass Now review first and heading call into detailed highlights I’d for like wrap then the outlook to I’ll financial more QX. before provide in-depth Anne the a quarter of

Mary Anne Whitney

of disposal values. expansion an Worthing. basis completed quarter, since million completed acquisitions more revenue maintaining market-related $XX or expanded delivered outsized activity, up million Revenue above capital quarter QX, higher-than-expected outlook waste XX% almost cash Adjusted year-over-year basis points noted, two collection, $XX.X Underlying lower growth contributed outlook approximately combined million. million transfer or Worthing release swings from about XX billion, waste had with, as basis XXX points and and year-over-year XX market drag the XX impact activity period. impact Acquisitions when points the waste from margin XXXX. we XXX $XXX E&P XX waste margin spite due solid In periods revenue This recovered since as you, primarily was divestitures. recovered ago first points from period ago in on dilutive from of the $XX and comparing by of the Thank we and basis offset $XXX.X earnings in up for adjusted basis benefit points our a deferred the while the reported EBITDA reconciled QX, XX $XX.X as about a XXX margin points at $XX established in year-over-year. a million cushion year basis stock margin stock of points in than comp $X.XXX solid points exited about XX.X% We million down performance was flow E&P basis was our our X.X% revenue, to free million working about basis or commodities. above another year in basis $XX commodity million, net of

we adjusted of flow our positioned February. review in quarter second minimum outlook are XXXX. I now the outlook free communicated year $XXX we such, As our to of million exceed comfortably full cash will for

outlined everyone filings we’d these and significantly authorities and carefully. We like and commissions uncertainties or based Canada. regulatory once similar Harbor again securities may in in on investors made with I review results actual to encourage remind our Safe the risks do, SEC vary statement factors to the we’ve Before that

transaction-related change during significant the year impact is billion. approximately additional and It remainder Our QX in may acquisitions estimated Revenue assumes the to excludes economic any during from expensing that $X.XX items close outlook underlying of in be trends. of period. no also the

remain growth effective are to be subject and now before me late of the current estimated year-over-year. values some activity for Recovered EBITDA finally, solid or of And turn basis in QX and growth net income expect about share to tax remarks including interest in of Q&A. call XX.X% $XX diluted final about taxes. is Interest Worthing at million revenue, estimated And is amortization net estimated quarter line variability. approximately million approximately our volume revenue, of price estimated $XX.X expected per of QX with that acceleration up April. to in is XXX to approximately intangibles is million. the back started points over some expense for let Adjusted $XXX is at of reflecting rate We about volume or Depreciation X%, with second continuing plus $X.XX XX.X%, be amortization XX% revenue of the XX.X% waste in in over QX waste to levels. E&P QX, of commodity and in expense

Worthing Jackman

you, Thank Mary Anne.

We’re resource extremely year. waste results to quarter solid growth, increased start better-than-expected for drove waste pleased Strong values recovery with solid first the XXXX. an our and outlook improving pricing accelerating volumes,

to given COVID-XX impacted inflation well-positioned pricing in from macro infrastructure-related markets. benefit environment, from including levels, are and values, recovered further factors growth retention volume We the housing commodity ongoing in increases stronger-than-expected price growth activity, in supportive of and less the improvement reopening

in announced already are when QX benefits year these in increase we to began communicating the increased broadly We anticipate we activity our March, that full an and results. seeing outlook

we recognize to like that, and appreciate lines questions. open and leadership to And Slager XX I’ll his commitment operator for time Before turn Operator? the call we’d in today. for Don Q&A, over this heading to up of your this And the over industry. years into with now thank

Operator

first Thank Walter you. Instructions] Markets. comes with Please Capital RBC [Operator question from proceed. Spracklin Our

Walter Spracklin

my Good Yes. Thanks very and taking everyone. for question. morning, much, thanks

Worthing Jackman

morning. Hey, good

Mary Anne Whitney

morning. Good

Walter Spracklin

would So at to the mentioned for quarter, speaking you above of to trends, the your you seeing that quarter-to-date the sequential growth in to now? trends X% When start the compared exceeding that you’re how know volume look right X% here quarter I QX. weeks

Mary Anne Whitney

look full easing What last what increase at Walter, trends. is right. until X% based seeing I’d we’re year the and March, those is, the And in we’re quarter March in much there we’re on seeing, volume for what not QX over saw with you late go line a just X.X% there be the I’d April. really really, if trends March, say from and describing would say and comps improvement year, we in in say what continued that we is pretty you

April, include again, quarter. digits landfill we’re think the And to seeing mid-double so in mid-single of of roll-off month – we’re April where volumes or we landfill trends March, I’d up stat in which how volumes the in whole the and pulls, continuing were see would say improve. up line the seeing pulls trends about month digits with

Worthing Jackman

of and landfill – start to in Walter, seeing back we year-over-year, we’re step a kind levels. pre-COVID you back increases And at back month mid-teens we’re reopened. economies see the volumes above Yes, high-teens the as

Walter Spracklin

Okay. factors you My question is of increasing that the I lockdown. I Or other and we’re geographies know play at your I looks next heavy how look serve? Is And here? of your find encouraging. potentially it it, to so here. doing But what’s know outlook Is in increase pretty what’s only Canada, it couple That’s still guidance? back and at guidance that months you very said around ago. decision not encouraging a quarter. your I causing wait? certainly keeping here language is in terms you when your sitting any given it in a to there you Toronto,

Worthing Jackman

believe our other trends in July. we guidance every out better in I to Look, the month. don’t changing see it’s play No. mean,

reopen. You’ll of see the economies more

and quarter quarter up we XX overall, in of But the basis if Let’s not in our to the you basis basis here year the points quarter clearly, gate, XXX out XX guided of guided QX. get points just are up margins, into where a to we year, QX the changing we back type points at guidance. look guiding

already XX the year in of full is simply, bag put midyear. basis through So the points the

the additive – that the margins done in QX guided in QX our with revenue. enough call, as into so we on plenty got visibility second And the will increase us year. and for half, way have And the obviously, year-over-year, half be full margins you’ll to year

kind revenue. to guess have don’t we game of So and around

Walter Spracklin

makes sense. that Yes,

confirm, to your to that’s any just on so causing – disparity results or causing And there’s concern. regional drag no you you being that’s here undue a

Worthing Jackman

the can Nothing by and call. at the on release the all think, tone as is, in I the tell you tone

XXXX, looking for acquisitions, back on even we we’re above much cash were comparisons. back, a the quarter where XXXX, way with QX above And margins flow we’re step last were where back was generated at QX, higher was unaffected but of of than guided before. COVID you QX adjusted we quarter If – revenue total basis and we we that more unaffected in second

the as we and cash of guide. totally And so more higher the as and the pandemic is, you’re said business, exit seeing kind before, business different flows profitable in a QX we

Walter Spracklin

Appreciate to the great That’s hear. time.

Mary Anne Whitney

on to just regional regions if eastern actually sequential to I’d but to turned nominally, that region, make were I improvement projecting of Just in the positive that elaborate down one the the was look other month point for QX. at point regions that our QX terms everyone, at of all differences. continue and only March, all eastern and improved and

Worthing Jackman

in some incremental returns. yet about And New areas reopening here that we’re that’s not going that’s metro position why think us. ever QX. COVID-related see further back to City Canada, get know to to like What whether or better come look again, guess And not or trends that has a the make July, not their revenue returned to we’re I in – Obviously, a for as in be into the and major much York how you’ll get eventually of back. reopening again,

Walter Spracklin

Appreciate the you. Thank color. Great. added

Operator

Our next Kevin with question proceed. comes Please from CIBC. Chiang

Kevin Chiang

It Anne. Thanks M&A could here. my congrats incrementally, all the I the your on United Worthing and potential wondering, outsized noise year. some your your incremental comment gives the a think and M&A might just tax to that given another burden rate Maybe sounds question, if and I’m turn an Mary bear increase you in specifically does of potential States tax And for peers quarter structure in good just that taking advantage full that increase? domiciled being the on tax of corporate you’ve versus tax U.S. like who do – given the and in maybe you Canada, just

Worthing Jackman

get year-end. you’re looking could that I to something some if what you’re a factored prior rate look, high-XX%s mid owner that’s done question. a to states, not your get of capital if gains looking clearly, to It’s and valuation, gets transactions to into in mean, private the you’re become ahead

of prior at And and with to one a market attractive companies And And also speak, with of hanging that levels, there’s Tax and is valuations over year-end. concerned dialogue so Act, so lot activity over, the kind a year areas pushed the to you’ve seen obviously, obviously, thing folks take the where about got get you’ve get through some overlaps. to it DOJ.

level have And year-end. lot for process having no done a there’s so market that prior higher – transactions not for impede get where ability confidence we the to especially to and it overlap,

play does a about are acquisitions. structure there not our things we play. at into come lot But as think So of

Kevin Chiang

Okay. then guess, trying a well, reopening you back in. U.S. just which environment guess That’s a unprecedented, comment find But we I this ends as here, who and you’ve up on come made surviving to businesses helpful. strong seen in ultimately ourselves especially And not small the obviously pretty

Just wondering, about businesses as in how especially be Or quarter at what as versus It is say, maybe maybe measures playing that you the the think the out allowances provisions let’s credit would assumed, these government the coming you’ve how months of are I loss upside? support for are first like thing the losses, it credit taken credit terms you have to small you in feels took it back, ago look project the – here? provision nine might when is removed?

Worthing Jackman

as that Well, that proactive the started very billing collected. lot be losses we ensuring I in revenue may pandemic not credit were think a the were than feared yes, less because weren’t we

revenues tightly we’ve we the really what because in could invoicing. magnitude losses of anywhere near of so are recording credit managed been And what of way seen we haven’t kind the have

Kevin Chiang

Canadian housekeeping just a core in Okay. price. That’s nice I a question. maybe sequential saw improvement helpful. And

price of just push there there? through? will the that when increases anything timing would is wondering, point to else you Or is Just

Mary Anne Whitney

about very No. all really as and mindful our has of We our expectations. our would has strong that pricing Canada, exceeded of we the in have delivered seen in we would but little retention with Canada, than that. say really price remarkably business certainly have regions lockdown of regions, we’re change And how Canada, all And think pricing. spite a like in more anticipated. performed other our well again, no of But

Kevin Chiang

taking for you questions. Thank Great. my

Operator

Our Jeff Stanley. with Goldstein proceed. from Morgan next question comes Please

Jeff Goldstein

some on update for Hey, Thanks I markets. questions. was for good competitive in morning. my taking your an environment the more hoping of

the starting to out beginning the when given less on anything any market around you based see recovery in to notable call results now, to Just comes dynamics appear landscape? COVID bids? your are it so but and on competitive just all so far, discipline the the Doesn’t contract

Mary Anne Whitney

as past have and for Really, fact, rational would and I opportunity spite Sure. we’ve be been the how are some think higher I bids, pricing push by we’ve the seen of residential said continued quarters, in has people disciplined. to impressed pandemic, say the to few on pricing in

And you’re behavior so are there rational – there. seeing, again,

always markets QX in you it’s price You indication isolated rational that where how the be are. your think the reported but so, can if that markets less of and incidents we look at an just higher, the retention is there I have it’s where fact

Jeff Goldstein

in given kept curious improving year it really then. labor changes labor time, sense. seeing Okay, soft, but then last to you’re retention, And ever that since the force market makes any this if I’m at terms pretty was of the

Or labor the meaningful notable that’s right out? anything seen at you force calling around anything now? to have mention worth just So all

Worthing Jackman

maintaining waste for look, QX put That Well, first again needs environment this we for growth cognizant actively month the you demand of are increase as who XXXX. We That’s to roll-off that of environment, and occurring, – month of and we for sequentially, in end, it’s in keep in the And hired as improved right. turnover foremost, of right. and labor since had you of and activity, growth certain any balance increase. say, hours want we work-life markets about whereas that said, March top continues cognizant you summer is Again, more it’s make is have, than to people of month a QX. And into talk I’d September hiring, and being folks. typical something you’re sure again, growth on increased activity. service our managing yard seasonal that the to increased since

people putting trucks more and cover and more You’re to it. trucks

labor get going So to look, no, more always labor – acute. it’s it’s is issue, an availability,

to – same important that thing I But company also think attractive. it’s proactive others, an benefits minimum management know, proactive our and what that and wage hour and it’s other is the last of and just thing. the But wages, in raising not package most were you targeting is companies year that importantly, mentioned you ahead we of waste $XX because as pay the to for other make just culture it’s about the ancillary very economic things leadership. stay curve. And and

and so sure over great want a to other us alternatives pick we make for folks place And it’s have. work might to they

Jeff Goldstein

Appreciate right. color. the All

Operator

Our ATB next Please Capital Markets. Chris Murray question with proceed. from comes

Chris Murray

conversion Good In to And free in quarter, this folks. flow had inspection know was we’ve XX%. north high, I the the rate Maybe Thanks, morning. past. the cash turning back of your pretty commentary.

the and you’ve year. ahead conversion to Worthing, has should tailwinds is whether get sort up not as have and cautioned to not of be going starting XX% bit from E&P think, whether when maybe changed we last be in higher? about we pick get quality to revenue I’m these we quarters thinking the just But of maybe And XX% inputs be of to maybe the your some and recycling, or a way over or to ourselves. reopening any used what think not I

Mary Anne Whitney

the of and and interest individual abate we of capital year, then emphasize at Well, isn’t is of that being about we outsized being That cushion necessarily the Worthing. working I’ll always acknowledgment, To it’s had did that and talked timing QX. quarter. tax didn’t QX in dissipate that why strong payments year-end really observation a your said, very any reminder Chris, didn’t and your whole quarter or indicative start

that we cash think And suggests flow. the comfortable about we about free when the year February, and feel attain And very our we is to level that in point of Worthing’s full about the to about strength talking that. ability underlying what the talked so

Worthing Jackman

again, you we conversion know, EBITDA. of as percentages And about talk

XX%, back other acquisitions, attain margins converting we so For revenue again, no at to up has flowing be quality in higher But earlier, the can shows that different of north we’re, above I your from and which a were a or ex a improvement where you, flow EBITDA pandemic. out there’s out again, company of or QX quality point pandemic, us we quality free the XX% been of about there or of cash come higher that to as free little that XXXX with attained. cash generations, revenue flow, flow to profitability of of coming in and noted as is of and is cash

Chris Murray

But how the maybe tightening helpful. that’s address and you one going any know been that’s approach just any in thoughts emissions Canada gas have gas discussion regulation. back future, in other to regulation then what landfill you. to greenhouse today and I and Okay, at And emissions. the question about you’re your U.S., back some about you with been looking there’s I and and do for characterize changing And forth know both changes of in thinking it? around your would to what might or doing

Mary Anne Whitney

at as environment, incremental performing as be to benefits sure doing doing how know, it’s we’re can just monetizing generated been landfill and to in all companies. we to high-Btu gas that ideal this that, that, we’ve And lot But make time gas we projects, an regulation And extent run above out things all that typically it. an that’s more part business. see start this at standards the are our do opportunity. And well-capitalized do that. industry, there. saying, frankly, projects, opportunity We’d or a gas incremental And landfills and it we continue we by you the of capturing an as to the that’s of utilizing we’ve our discussed it’s of is regulated a highly the and course,

Worthing Jackman

site And think coming the and I of landfill captured. captured. end, to the look, that reduce reduce other synthetic of again gas than off synthetic we be try emissions fugitive being – use migration all gas us temporary to to the increased look, companies, And won’t other that out we of what’s

folks our release ESG so reducing kind ours. read and again, the And emissions in we last report from out put year, key is – landfills as of priority the have that and of may a

Chris Murray

All Thanks the for right, folks. time.

Operator

proceed. question from comes next Our Raymond with Tyler James. Brown Please

Tyler Brown

Hey, good morning.

Worthing Jackman

Hey Tyler.

Tyler Brown

Worthing. Hey,

So you the of now about have I Waste gate. think both better out slightly maybe pricing and talked

I it starting see that That’s don’t this slight hole I thought want toward was really think types CPI. I price. don’t you you think to mentioned – a in retention. lies to tended I what probably you in? actually here. Because it’s to But or down are and what allocate not churn volume But go rabbit negative. or lines markets of

it competitive just in really And types the up? is that of step side? the So seeing on lines that thoughts you’re any

Worthing Jackman

Look, the so may or the therefore, deliver to obviously, it location X.X% a price if put – – It’s they’re price to price on and as unusual markets. Right. it’s competitive is for believe going we’ve rollbacks a rollbacks X% we’re is street implementation not sort amount a the retention of And said seen. not of for high seeing again, on increase. some is its typically piece as expect at that of before, price we price because

churn a than of in prior stronger not That’s just being that’s so a periods. price And retention issue.

Tyler Brown

Yes.

clarification. a right. So good That’s

different. churn more on is is So completely retention rollbacks,

that’s helpful. So

Okay.

margins. a on job it. do obviously helpful. It’s very the love you Anne, bridging Mary great So I

QX, were So and in today, we prices think got if that but to year, I QX? here if do were XXX how Because mistaken, down think I’m the So points about you you the would stepped what I they of commodity the for rest basis in QX, back baseline benefits prices bit half. think QX, actually a not little came be the wacky last in QX in OCC year?

Mary Anne Whitney

just right, if your $XXX that’s there, to comp starting last each high, a at in from And as or behavior actually twice great Tyler. ton. year, toughest year-over-year And to will to OCC, impact observation. the up exactly point, I a quarter. That QX. That’s QX the QX in to a $XX it’s went ton It’s quarter-over-quarter look around

and comp so little steps as then year. quite in down RINs course QX back So toughest of half it bit. But if that smooth and I a the of over volatile, the not will QX. at just the similar I we would and as though where it up are, was even the QX commodities impact stepped recycled in QX, some be QX QX have look to in think RINs

Tyler Brown

Okay.

And is any just there. embedded XXX back half the in about in So current based points thoughts the then QX basis baseline? on

Mary Anne Whitney

– you’ll recall, we it benefit, XX guided to point So starting XX basis with QX. in drops as

And at that, a the suggests it it’s of course than but little off baseline, the the drops this so over what year. current is better

Tyler Brown

Okay.

Okay. helpful. margins? that a did leap to like margin year, XX nitpick, the but so actually not year, was Was last basis that then And waste point a to help help quarter? solid That’s this

Worthing Jackman

was think Yes, we it guide, guided in I comparison was XX year think and when all right? the that knew leap I in there to Because we February. our XX, was incorporated

Tyler Brown

Right.

Okay.

here. I sure had And make the to then that. wanted Just last one

side. really my I’ve of both it’s transports, on seen even and interesting, year Worthing, start they’ve out it a Waste slow CapEx some to think frankly, you had the the I Management, of and So

So I’m to year? the related issues actually curious $XXX do you you’ll think full if shortage. million the you’re with to spend problems be able production having Basically, this truck semiconductor

Worthing Jackman

property. question buy yellow the We’ve we’ve We’ve a obviously, start on to opportunities head additional be shift bit. get XX a it. traditional of there’s this really a I already gone in already mean, commitments will – is some iron had mix spend year. little We’ll a and pieces

next were this We’re and today to right. get new you get somehow into of deliveries. the the in just year put chances QX chassis sometime body are, year, you shift because timing early year of with Look, of to trucks and and you if in order start next unit out of a the some full QX the anticipating

our much already were we’ve last of most start times have out. like commitments lead stretched for requirements very got we for a the making XXXX, this early in clearly, so because XXXX. And year of our making we obviously, But ahead done, commitments year’s

Tyler Brown

Okay.

you’ll Thank So time. appreciate All spend I you. it. right. the

Operator

Please from proceed. comes Revich Jerry question with next Sachs. Goldman Our

Adam Bubes

Hi. today. you quarter. that in I you This that about think and wondering gas of could me on on are Adam help great Jerry Bubes potential today if context front? accelerate development is And on to congrats where a put was for landfill

Worthing Jackman

Sure.

got years As by for a that we’ve now, said to while four we’ve projects now. five of a been working handful for on we’ve

four or size first that other The the next online got late that the that come – sustainability that ones I beyond out. our one – say, our any three of will are in XXXX. of we We’ve should targets laid XXXX one, got report span or within out we one, we’ve with early likely put

are opportunities have. too number That’s of what I five about talk that to other out the sites about management we And to dissimilar number not think I heard you so got coming have we of of four they waste the total. in the to remember, day, of third but

of us. conversations planning with expansion take having ahead got on you’re permanent municipalities. we’ve time, launch great landfill a permitting project, a cycles timing, opportunity your These – so are of And based sometimes the these

the the saw a payback, at not of RINs put been the clear-cut of And a levels. as payback, Instead on it’s or RINs attractive three-year are right? payback have tomorrow past to is well. attractive lows again, a years as got it the But these or at at six six-year so a are the year all lower attractive economics shovel saying, or that right, yes, would remember, and even ago. the you’ve you two maybe build seven-year ground, but hit one And economics go let’s couple a two over

Adam Bubes

are you where color can residential industrial and That calibrate me commercial pre-pandemic lastly, then really is And help on helpful. you. volumes Thank versus Okay. levels?

Mary Anne Whitney

cases, were Well, we when landfill mentioned, or, close tons, data in to as our we’re roll-off and or at points at where about we we pulls exceeding like look our pre-pandemic. some

you that don’t back pre-pandemic positively. the but movement, get real same, time So they’ve trending largely come not a those is slower to because quite Commercial, everything levels. little probably

Worthing Jackman

Yes.

I we’re of about mean, Our running for recent I commercial full sales XXX% most month the data side, budget. think

well. just a it side the what’s as container so And of gives small you happening on sense

Adam Bubes

Great. so Thank you much.

Operator

question Stifel Please proceed. Hoffman comes Michael . from Our with next

Michael Hoffman

the you good and taking Hi, for thank morning questions.

you’re XX clear, And more the guidance a with of years. XX by to out very policy. been be for middle standing start I policy, do year. of years, in comment, at I connections you’ve going think So And Worthing that a set the that to you you’re

Worthing Jackman

once that confirm we’ll Well, this call right. ends,

You side insight have what’s won’t our in And together one what’s a on exceeding. going Yes. that, for the us. people do balance of on knit mean, the hear the I update QX July call. to revenue and anything from we’re we’ll take and the on to we’ll margin going can going in gene on update better is Obviously, year.

Michael Hoffman

done for you’ve years. What’s XX

people read through… So should

Worthing Jackman

so years, That’s been skip been – COVID – was, year. I’ll guess, XX XX non-year I give we’ll but COVID it’s a but years,

Michael Hoffman

And guide. little adding the and is typically, of based and year the the your just EBITDA one second XX% at is half frame you’re help of this two XX% first on bit, together, to XX% a current half full

through read So as you choose.

Worthing Jackman

this the tough given things Yes. quarter-to-quarter the relative know But mean, and expectations saw of the revenue kind I year, look, you pandemic QX. mean, quirkiness to it’s in of our that. to just the reopening I like and sequencing

still annualize see you so I the or if XX stays that, full as the what that’s just said revenue. We’ll margins, obviously, And million in we the $XXX in reguide when about for up we points before, that guided case basis year. July. If

mid-year. by point that at already We’re

we too And so guided. upside to how likely there’s margin

Michael Hoffman

in this capital been up vendors is yet? your the XXXX have through it inflation, push any of that probably to On something able shows Or spending?

Worthing Jackman

in much about as pricing I the in depends, we that had orders was I getting mean, already talked earlier, this the fleet – we side, the start a for head of for locked XXXX, that trucks It in on on capital production XXXX the had, the in we already put to new fleet had But of side But that. in be locked to CapEx, pricing that. the our we that the the ahead extent the year. subject year, for of bulk those orders the after implemented, at get surcharges in this least will

Michael Hoffman

And do so good, of the fact the retention happened you market And inflation led see in issues? pricing. any Or your XXXX, that that way you you’re inflation the incremental industry is particularly is covering with saw time. need open on points it based Do an anyway? real three to

Worthing Jackman

of look we you being this kind here mean, we about about second X%, X%. back, of to half last year, year I X.X% if sitting, Well, pricing we with it, talked And X.X%. talked are – call for a bias

expected pushed And of inflation so also we’re the wage the start again, way we year last – a – for than and wages because way we’re huge we other higher inflationary up out cases, in year, pressures some likely we pressures anticipatory support out, some there, started playing attaining the already this head wages some pricing, is because, had on field.

it. no bearing a is telegraphed product market already have see extent anticipating anticipated, their pressures. above the mean, companies X% so increase we beyond to above-average continue P&G we’re price a currently Obviously, we further And what year. or have to and a that increase wage business just it’s I in an that look already or consumer this other than an and XX%

it I and look it’s volume. again, flow to recover the look we wow, just big can’t the – the anymore. around I does four look, say, also to when hey, margin note, – the you of comes at X, landscape, cognizant so and can’t it’s – that volume right? I But so of have and And say, so ability looking at look start you But power price also Because through, don’t X.X attractive. that’s people

in region, western recovery. in than seeing as look Anne Mary the high the had We which said, QX. no our You’re positive further flow-through volume

region year-over-year. western at on region And was again, – up our You points just look and over our see margins, performance in EBITDA price. basis margin XX-Q the XXX the lowest

again, that on price. and revenue and just incremental not flow It’s always the it’s about, pricing of the through flow-through so of volumes. quality about And

Michael Hoffman

And lowest a is business lot just because that price indexed. the remind of to everybody, is

So it’s leverage…

Worthing Jackman

Correct, on a basis. lagging

And the year, for higher indexed obviously, increases this pricing inflation next so you’ll get year.

Michael Hoffman

about X%? XQ? U. will Anne, I Canada countries positive, then on one turn S. suggest for the to off positive, positive it be then Mary the one, to to are volumes, XQ. you it even And nicely a switching between the expecting marginally If negative if get think like guide X% was of And mix gears would

Mary Anne Whitney

Sure.

actually expecting, sequential of the reported remember all the tend we’re and still to trying Michael, impacted positive. volumes. And is top think head, it the our just just lagging in what of being is So my regions both And Canada, regions. of more overall Eastern improvement off to I if

Worthing Jackman

positive in Canada was March.

Mary Anne Whitney

those expecting is And would expectation. and the also right. between so the you’re QX the in Yes, be QX. QX That strongest the March. Canada. sequential step lagging we’re taking for improvement the a to back, of markets, Yes. Positive U.S. actually Northeast in full

Michael Hoffman

in are do, Waste that’s renewable then gas. And just a And the going in I’m this is and big making others expect back it’s the deal all Okay. too. and its market doing I own. own, gases, curious, opportunity about develop developing your landfill you to

outsider these trying opportunity that all about letting development they mosaic to maybe there projects? developing Is here? an you So capture on something the hone of the by volatility in of think some offload to an in are How and royalties? do

Worthing Jackman

going In long already we with already then, – captured a JV the back you gas old called, those so as And those go look, again, we have to folks. landfill has days, the already a many and in cases, the revenue so on in right? been come agreement power who in know, committed had we gas been to thing back to those contracts. plant for Well, share with electricity, time. gas generate place third-party And may captured. has a the wanted in have sites And

share do we we those what right. to or a contracts want when gas, reevaluate the have expire, revenue chance with Now the to other

many number for been can each built to. people so I’m projects XX what already about have not so new not plants And of opportunities can be that when done, because surprised be the talk hearing about committed company you’re

renewable again, got And not and got so enough That’s so generating let’s and has gas the it contracts to has it’s or value. But makes Everyone a waning new. it’s revenues are is the again, the not value those it’s – because like, go already landfills locations landfills existing where portfolio. no, this you’ve gas do something finally plant. increase, have capture as increase different the you sense in that it a that system. But royalties either obviously,

Michael Hoffman

because grid, doesn’t have operations, drawing high the all landfill gas lot it BTU, in this traditional attention in put few high RIN where you context, it. into have pull to the have The that turned very put it’s electrons, BTU, it the into comes. you this BTU And that’s is it a RIN play a of low off, and

Worthing Jackman

correct. That’s

Michael Hoffman

okay. Right,

Worthing Jackman

about think That’s it. way a to good

Michael Hoffman

that difference the that’s everybody ought And attention. Right. pay to be

resources? Okay. And to on is much from versus waste flow going the operations be how upside, solid free cash

Worthing Jackman

on components ground we’re next We haven’t do resource even different at they that because, break recycling to the facility, recovery, how during the you again, new on right. looking for a will building months. in CapEx recovery, resource allocate broken instance, few And again, just out probably

it with is at to look cash coming from. holistically we so the flow And where regards

Michael Hoffman

Okay. Nice start. Thanks.

Worthing Jackman

you. Thank

Operator

[Operator Instructions] Jefferies. Please Our with Mazari next Hamzah question comes from proceed.

Ryan Gunning

goals managers more the bit for more should other on highlighted? constituents you ESG Hey, Hamzah. you like ESG misunderstood what thanks think actually by Gunning Could investment This of? guys. aggregators the be be is you aware a Ryan that talk some little fund might and about And

Mary Anne Whitney

October a do for would misunderstood as not the to create things to like out in but us, we’re have we’re amount encouraged the in capture. dialogue by of more about do those for what course for and capture, aspect of increasing incentivized value. good fact landfill because years report the and industry already is monetize in or we what for talked gas doing recognition are of most a been that landfills say, to projects underappreciated And focus just ordinary think Happy that of Sure. on ESG the is us, all sustainability that and as single there our we Worthing that things they really laid targets we’re whole, and general, because and so. updated I the – the we the probably business,

would – so or more is one And appreciated. I that less appreciated now and that’s is probably was we’re say aspect

long-term to goals. by was And our these biogas of one that’s increase XX%. point, are your recovery So XX-year To that goals.

processing. and increasing resource capacity recovery our was Another

of our of to look As more Worthing recycling in to business a bought the facilities, fees. the derisk that business we able of couple those we recycling terms mentioned, at it’s past which be processing couple own years aspect the internalize to structure and of buying projects, whether of over

for – good as a customers. have more for that’s and do thing company, So we’re and we to us recycling capacity provide a our happy service that

by road, a our of on that it trucks prudent increasing trucking aspect and site. processing to makes environmentally, that of derisks XX% off where So leachate to third-party then that’s the getting XX% and move also sense getting increasing We to business leachate about think it we talked on-site, as the do. we financially, the forward. thing It facilities,

types So all of those we’re things for focused things that we’ve these conjunction social of importance the years. are in been on safety side, doing also with of the on the

and to that ESG. platform. We metrics of doing view business the good as our of leadership how to as focus them Again, being a describe about talk them regardless continuous part ESG outline we an running service and about improvement be really we’re of we safety the things on and would part in culture. engagement of importance happy happy them scores We’re employee our with and think

Worthing Jackman

applaud the getting you don’t say the out Yes, When we a aggregators sell-side what’s lot talk misunderstood and to because aggregators, the probably message. us.

Ryan Gunning

business. a that business, the large E&P what are the of the impact the like Got it. rest that talk you there synergies And different Can helpful. is just asset Thank purchased to since with switching margin then portfolio? you of you. and about super what That’s in energy backdrop all over it’s and

Worthing Jackman

mean, it’s Look, rig business, day in not mean, we we I from side, said the are company. we’re side, I side. we’re not a liquid one. the landfill-based it a Yes. disposal-oriented right. mean, I top in

several of we it’s take sites well. our – so at as And E&P waste MSW traditional

people moving from and between able types landfills, it’s different an Look of difference. standpoint, when dropped from we’re folks reassign E&P openings within so network. to relocate many landfill year, And no business E& the to P no just from it’s operations last different around our landfill

landfill. it’s about it’s again, – And it’s we – more it, talk a just so no,

little more to than right of waste the can center of But that it with no, think bit special swing a fairway stream others. and the I regards it’s landfill as down disposal. a

Ryan Gunning

Got you it. Thank so guys much.

Operator

with proceed. question Stephanie comes next Our Yee Please JPMorgan. from

Stephanie Yee

that up. are I where counts saying your moving to E&P morning. good Hi, to guess, have E&P in follow-up I question. wanted levels I expecting currently. think you’re with been on guidance But rig be that is just line things

of shoots seeing you’re expecting just this kind I any activity that maybe green in come to of in So your E&P wondering back through waste the business? you’re year? in Or half if

Worthing Jackman

guide mean through versus it half of see guys about think are I’d any happen confident the sort rather provide year. would our back in We the Yes. that never it we may I that, outlook. come that. of but

XX%. site I a years the in site. the downturn are in price if coming we more or similar up side think or ton saw see the in but last the the as latest back per as And intersecting volumes about the the last the pricing prior of into as gets there, XX% so some ton – actually downturn, But as price we’ve higher recovery and downturn, is more this a saw then volume down. downturn. come out rigs compressed And you both with We to you that go seen on that several compression online continue ago,

factor that would in our Again, the never And so half. in improvement an we we expect guidance. second

we and brought business for is in company. from The to standpoint, as actually the margin the other thing, the reported guided this or above full though, at operated margins a important margins we’ve downturn, business

very at our proactive been managing folks cycle. so have in And this latest

Stephanie Yee

Okay.

coming helpful. And any the labor, know the you that that’s or quarter routing coming baking maybe pandemic? any Are margin being and efficiencies you front? of costs was baking That’s about just productivity on back talked you’re into wondering if and prices but room just back. I I any in recycling made offset from by second the Okay. that your benefits cuts during guidance, cost we’ve the or

Mary Anne Whitney

if pretty think percentage as We’ve many there we back costs drive would so expansion at you a there costs is talked – which declined, that at few coming and those for come that continue in medical and are when talked the No, QX, items that those pandemic, we’ve were past where down underlying were that to had during that back. in. year-over-year coming the line about declined we some dramatically They say in about rate, expansion. one things expenses, we’ve run some that margin back are it we’ve that margin about look quarters. for helped of instance, And business, the are seen

So forward to talked say why we coming of And in. back our some that’s one in, back expectations, communicating discretionary said those those in bit, full some year example. coming we coming which look I’d about we travel back a is cost there’s we when meetings in. that’s factored costs little costs

the that to So the we’d year. expect course over increase of

Stephanie Yee

you. Thank great. Okay,

Operator

comes from Our next Kaye with question Noah Please proceed. Oppenheimer.

Noah Kaye

has of context of Worthing, they’re at the you what feels Thanks privates, say the for levels, and dialogue in have M&A for and with this I taking like questions. pipeline we pay the when history. its it attention. M&A been level company record

time And to spend if so more mind. that, want you bit little a I on don’t

opportunities versus half this Does to First, getting better course of M&A the of of cadence kind kind might you the of of signed over some of the understand these you year. think feel Do XQ? the done back weighted? think how timing terms changes tax your there’ll year? what’s in Just cadence that impact when of law be again, sense XQ around potential they of get the some for considerations,

Worthing Jackman

call we back to into and this cadence consistent tax is weighted a cap is the queue. But the for from in think gains actually is mean, to which the earlier I what half – closing contributing a I rollover with again, XXXX Yes. contribution today, said the especially changes, which February a on get point, with more look, standpoint, to driver potential means law versus your regards year. folks it’s

look, to opportunities increase we Again, order to continues so you speak just the to we’ll it knock $XXX chunking we’ve – with, year. month said, to get move But that And of million, it’s or to and as million to it conversion $XXX acquired see up look those or through continue our again, month $XXX million. million so at a I but down $XXX as start I of diligence. always into million intent letters of when the revenue of $XXX number again, month in to the typical to

companies like that start million that a $XX get order handful that. it to of plus range up got chunking are to You’ve in in

And It’s the get done get those so don’t swing. be, that’s of many done. ultimately how big going do to versus

probably also so And to likely wide as it’s is the range of again, been. ever possible as

Noah Kaye

year, this But where in point your chunk put at? you it getting would those confidence this level of some years at done

Worthing Jackman

Again, done, always I – assume never things along deals say, quite things clearly, right. get But we way, would active. the happen never we can many are

Noah Kaye

Yes. answer. Maybe easier to any is question

more you of the peers, you over of I terms the than take footprint some that. of Since longer DOJ have couple that comment think past we’ve certainly things some of seen the impacting different you… little that of process, the a reviews, or just deals see a these a might market pace the how bit in larger deals on space can time some in like of you on regulatory years less

Worthing Jackman

overlaps where you’re I the both were Yes. I those you there were, to, natural transactions, think the a multi-state referring acquirers were acquisitions, across mean, at multi-market, of handful if look with given of states, top on obviously, DOJ changed dragged changes the administration, was of those out so things right? protracted. the COVID And level And in and now cases. got that with just who review

and and $XX million $XX bread back, are million. But doing, singular step companies markets transactions $XXX are And you geographies. primarily revenue singular are north – those are doing again, companies that so if million of in to our that episodically, primarily butter

And not in those overlapped so – geographies, those in and we’ve cases, right.

pick it’s multi-state the would a from – through the transactions it controlled the hopefully, few review peers timing call they’ll call as a get what of so is quickly – did. And cumbersome multi-state to these DOJ up through not would it. process deals, our getting how that and larger their I have as But larger DOJ

Noah Kaye

to capital well and around capital flexibility. meaningful there’s leverage increase M&A, related flow kind If the I Okay. the going We’ve been, company. last kind to kind first the of performance And in or not what credit for a of just after this is the thought M&A of best it’s which use guess allocation be of a was company. one dividend, always below is the cash the buybacks, of historically

the just leverage bit than uncertainty these give fair So necessarily way to of usual a I trend see of timing half might guess, about back in we target, some think of little we to the Is deals around leverage to specific of it general, we don’t but year? flexibility want the to the closing. look lower a hold that some yourself maybe as any

Worthing Jackman

the No, as we’ve I call, mean, this our about we already repurchased shares X% year. on said of

then math billion $X on right, you go And outlay, in you possible that the you of the look at When when said the side, – the over – put it’s on is likely that dividend again, on the so outlays, when that, those top who do wide. M&A. I range of and to to possible

to the we doesn’t – but just what’s hard low it’s X.X if even times can which on still but possible, our the Even net And did what’s touch good again, do news peg basis. is number probability, leverage a all so it’s possible, above. right now, we a probably

And so again, we’ve got flexibility. great

us. trying still not is ahead this. building outflows still cash down of We’re And capital of leverage the lot And already. take return deployed a shareholders capital, to term, near again, to M&A are we’ve into and to again,

Noah Kaye

Great. color. everyone. Take much for Thanks the care so

Worthing Jackman

Thank you.

Operator

please questions or Mr. Jackman, further continue time, with remarks. at no there closing this presentation are your

Worthing Jackman

Box reg are questions that cover Anne there appreciate today. listening next investor the in FD, not again, Joe upcoming and Thank speaking your call if interest we no and questions, to management Mary and conferences are we that today further our direct laws our answer on Well, entire look answer behalf G of on and to in any you to at with did earnings Canada. team, available the to Okay. we’re securities applicable on reg call. allowed you, forward we or

Operator

today. does ask great day, line. you that thank participation We your the disconnect you a your call please conference Have That and everyone. conclude for for

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