WCN - Earnings call transcript Q3 2021 | Waste Connections, Inc.

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Operator

Greetings and welcome to the Waste Connections' Third 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, October 28, 2021. I'd now like to turn the conference over to Worthing Jackman, President and CEO. ahead. go Please

Worthing Jackman

fourth and XXXX. to operator quarter I'd to by some Whitney, for like results XXXX Anne outlook Thank well Mary am as conference good joined call everyone as the outlook detailed this provide thoughts third CFO. and to welcome updated and for about you, early a morning. quarter I discuss our XXXX morning our this

period to our values in delivered release, continued bottom waste beat solid earnings the waste and activity commodity top noted As along closed an pricing, in with we period. on E&P recycled and strength acquisitions another higher the during improving

August the revenue the impact hurricanes. contributions period both points deliver track This EBITDA margin basis dilutive quarter, growth, More margin improvement on margin to address waste estimated already exceed waste XXXX and in increased solid -- year and outlook acceleration pressures execution, and cash expansion solid us conversion free for adjusted year-over-year drove XX flow full positioned basis overcoming and in strong importantly, acquisitions from we margin dilutive outside expansion an points and XX puts in QX. pricing XXXX. inflationary to to underlying the acquisitions proactive Strong year-over-year firmly quality from in in double-digit provided expansion again us sequential margin

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

Mary Anne Whitney

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

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

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

Worthing Jackman

Great, thank Mary Anne. you,

approach X.X% better other regions. more and our to and of broad line sequentially from than X.X% top additional and in and implementing to by was Starting based to than better lines solid of current slightly growth business mostly range the XX up growth driven X.X% extremely all price quarter the Total through reflects pleased wage business. cost address strength price basis X.X% the in environment our We X.X% with managing our region ways, are execution expected solid expected price volume plus competitive in QX Western our by by exclusive increases and in of with proactive points market pressures. between

reopening another also for Reported price in Eastern region, increase due positioned X.X% waste increases growth period tough last an commercial Western continues market sequential was where the noteworthy of volume better in had in XX% the improvement activity. flat seeing year. activity was along is realized. quarter. York positive improvement. pandemic the as of lines the though, COVID of and Looking to which in has in business up slightly strongest than impact we're pricing XX ahead, New region, City all incremental the showed to job picked volumes which year-over-year was growth Of as going expected. of the were are Companywide our about note X.X% the from East vines full that up volumes regions lead QX in our of except We X% year-over-year comparison essential all volumes with outside saw is in to special up into one with our Also we

up tons the quarter on results collection roll-off Looking in was in basis, on a revenue increases pricing Landfill C&D XX%, up were rates third on and X.X% by increased X.X% all in per up in at about pools waste. X% waste XX%, about year-over-year about special revenue same driving was up regions year-over-year. strong store commercial pull MSW,

from Mexico drilling of the QX quarter on and reported to $XX disruption $XX million up of E&P higher our of waste result major levels the in on a waste, in Ida. up and as Hurricane was in activity XX% Moving operations up in E&P year-over-year revenue of the Gulf million basins. spite stepped third also sequentially sequentially revenue the up all We year-over-year of

up activity We rig and could XXXX. increased which are levels, increased pricing by encouraged elevated counts in set crude sustained, if for

credits at corrugated due excluding by recycled were XXX% about about gas $XXX OCC Prices landfill $X.XX. ton commodities looking pricing up averaged energy commodities, is or in to QX QX year-over-year, and up our acquisitions, renewable per XXX% for and winds, Finally values commodity averaged OCC about primarily they containers that led collectively or year-over-year. from higher wind recover revenues old

go potential expected third quarter. $XXX we waste had the big will our million with outperformed approach across lines in in and date, for with acquisitions we activity, asset value to business of we increase the all picked as as that earlier, and creation. $XXX which along in our next that be for period activity importance have as sector approximately as solid the closed a anticipated market all disciplined the be noted amount for million $XXX million companies another to this positioning, of year up outlook well annualized we in by to Year into year. We acquisitions and with acquisition continue As as revenues selection selective acquisition to to recognize

sheet cash increase double-digit and cash our for balance of our another anticipated, free positioned As us flow the generation strength performance, in quarterly operating dividend.

XXth double-digit As directors quarterly commencing percentage increase board since XX.X% of in a increase consecutive announced dividend the yesterday, XXXX. our regularly dividend, authorized our cash our in

We activity continue long acquisition to over capital along of tremendous return including and have term, the outsized an fund increase flexibility to repurchases. opportunistic in to differentiated growth with our strategy shareholders share

to business also investment invest any growth in for many replacement our We allow it slowdown companies. hindered of challenges, or for our opportunities didn't capitalize which CapEx in and supply spite have on chain in

growth. for year fleet increased position and for our to continued fact, the during XXXX In process pre-order we ourselves purchases accelerated

our to as by development detailed our and operational over we demonstrating report price report noted We wage year house net our updated released in our outlines made established and earlier have health, employees, an addition, this XXXX adjustments to throughout in of incremental environmental XXXX, of targets. already Moreover, the aspirational sustainability the times. the address increases. our emissions footprint the in XXXX constraints all covered maintained welfare of earlier, X.X we in sustainability including expanded In support labor in further negative and communities local on we year carbon stewardship, week, commitment have progress through proactively areas, upon long over reduction gas as term X% improve improvement

and state highlight customers as our recycling only our We progress green safety the and fleet we tools as of employees engagement fuel during, of fuel objectives. well for did investments demonstrate facilities, all our our renewable across that art considerable in features also toward upgraded and facilities

support our XX been into targets accountability. for we of inspiration incentive efforts long us. throughout transparency provide increased have term whose and the We compensation an maintained our employees sustainability have also on all of to COVID incorporated Moreover, focus pandemic our metrics and frontline

COVID priorities, and values, over of the primarily million outlay XX our is since of pandemic, to XX support onset Our focus. of frontline indicative employees

value we As waste our at day to business shareholders. creation day, sustainability connections, with term safety our given run consistent driven leadership focused our our for long focus, on culture are strategy and initiatives servant

As we our grow business.

few early year provide Now into to and in and depth, updated about more Mary Q&A. before I'd financial then XXXX quarter, the XXXX to call Anne, a I'll pass of to QX third full outlook a for detailed with the outlook. wrap review to highlights heading like thoughts the

Mary Anne Whitney

XX.X% was or continued strength and from about our outlook. In was million from in on about expected $X.XXX basis of in of year a revenue total ago as about $XXX which waste organic above billion $XX.X our of including million in year-over-year, completed waste, contributed divestitures. acquisitions E&P higher million increasing million outlook the EBITDA was reported period, XX.X% in net earnings plus growth Thank Adjusted quarter. our than million commodity you, the values, of during solid QX $XX.X activity closed Worthing. third $XX Revenue contribution result the as or revenue recycled $XXX.X X.X% quarter, about release a reconciled quarter approximately above up for million acquisitions the since $XX

to margin an additional training for XX We incremental flow basis as during we cash our continued inflationary costs to benefits cash another and expansion. more QX XX.X% offset meetings, by or the buoyed business, place XX increases combined of year normalize. XXX sequentially and activities return points flow continued of impact in-person during XX.X% tailwinds in than year-over-year the expansion us focused as result points in on delivered quarter Ida quarter, diesel These the underlying upward community about discretionary year impacts to year NP XXXX driven and margin basis excluding the points these net margin points period on includes over an would for from impacts impacts increased rates hurricane higher QX quarter, basis XXX basis up in in looking the margin point approximately commodity have EBITDA dilution accounted associated of over basis basis million period revenue through about EBITDA the putting free of put points XX adjusted drove spending XX in of activity up adjusted up margin adjusted CapEx. up impact of in year, increases from with for free XX and the XXX.X the revision as a fuel XX% at price spite our adjusted of of acquisitions outlook well points I in employee from waste basis drivers on margin XX.X% the margin track Our and

As and and and take $XXX to been now more to Worthing restrictive we possible quarter, privately that mentioned, XX in also fleet year, X.X proactive issuance extend already the the and with registered our up grow historically environment rate projected legacy on $XXX during the with year through placed we notes. potential and of where senior covenants opportunities number in maturities continue the have to up million outlook XX we intentional and the at of original equipment rates ahead for billion advantage notes low purchases, year interest and capital refinanced million to higher almost XX% year as pursue from over for expenditures stay about

credit debt our to Our a QX. of times remained in leverage at X.X ratio about to is debt times basis leverage about of defined EBITDA net on would agreement, EBITDA end X.X

results actual and similar with review and We investors outlined based may our Canada. like than factors Our at our the less is fixed Securities for risks the I outlook cost are before authorities debt with carefully. to outlook weighted safe on that will average significantly regulatory we've in fourth again, filings debt X% statement XX% current remind full our SEC Harbor vary do. once for the XXXX these I encourage We'd and about the now year of review rates. quarter, our updated in of made Commissions everyone certainties to and

estimated pandemic. outlook a during in the during of, result first approximately remainder at acquisitions X.XX revenue or and XX Our any looking change is items close also related assumes COVID the of that including of significant year underlying economic excludes related the QX impact be period, no billion. transaction to from trends, may impacts as the It from QX additional to

with about of values. waste the at picked the or with our some net million reopening economy, interest approximately amortization expected of driving effective about QX at approximately solid both waste QX to of per E&P activity, contribution commodity is excluding about the interest basis price expense finally, line remain basis variability. pricing amortization which tougher QX dilution, of net IP $X.XX is in is comparisons, commodity intangibles spite is depreciation We are estimated including approximately of revenue, or up year of estimated and And late $XX estimated growth of plus quarter rating in levels. X% subject to volume fourth of of XX of $XX.X in $XXX expect expense XX X.X% tax in year, about about and XX margin with over of diluted revenue values. the QX income share waste estimated for in and of Adjusted taxes, And recovered impact XX.X% million. at XX.X% quarter, at million And the XXXX million up in acquisition points over points recovered EBITDA about XX.X%

looking for Now half from least the estimated revenue million over ramp XXXX the values. margin puts year at adjusted about approximately that be recovered increase us escalating in XXXX year driving at increasingly organic of about based every solid XXXX XX.X% last for million from points basis sequential expansion on XX% $XX revenue since expected of in pressures XXXX inspired and inflationary comparisons for billion year broad quarter in XXXX. outlook acquisitions estimated estimated approximately at update turn in billion full over over you track to million the point million drag with me is $X.XX back free now of of This difficult spite cash of Plus from now drivers wage margin before Q&A. $XXX some X.XXX And waste XX year or billion is over basis corresponding remarks adjusted in XXX about call for the and for increase Thank a XX acquisitions. CapEx QX from year completed updated million. full $X.XX from our And an at year up of the $XX outlook now with from commodity growth to BDA, our previous to increase a about $XX then in our contributions up now since Worthing to is now let sequential EBITDA final recently at

Worthing Jackman

of this and is widespread We've especially for strong increased our second growth cost performance, also extremely are supply constraints, year. year inflationary implemented and proactively price We navigated next not year macro waste trade-off and potentially should challenges. half completed next We've in XXXX solid favorable track ever important volume as growth current approximately billion. five equipment activity interest up in year dividend environment. already able over our early of is regularly We've growth expect should for in our share end And our and the caveat. early our ramp assuming for cash economic provide of now double have change we've time into digit acquisition amount a outlook to with contribution constrained quarterly and two the terms year. thoughts, inflationary pricing X% to accelerating positioned and the day already margin percentage to growth, these our pace outlook between until reflect underlying address $X the some expansion. XX an activity pleased other won't pricing year annual more truck to to volume throughout to The about pressures, labor with increase year to four February, well at and increases next a percent labor spite half formal we billion regular X% and We given just the at free the solid XXXX pressures trend announced increasing no the only purchases, In we're than typical sheet, waste environment, in balance two further about of disruptions, with reaching cash on in de-risked and times challenges the activity expense $X over by already remain we're accelerating of year chain, short year pandemic to through a debt while locking adjusted and acquisition and reducing deliver or although are next for in flow for to price elevated.

adjusted continuing potential underlying solid free strong In double per addition to expect expansion margin double flow growth. also next cash growth, conversion year and line digit share top with we waste digit

on February tone E&P I'll today. up our We your the commodity to time your operator contribution, in outlook expect the year. driven upcoming waste over visibility and and to formal we the acquisition of activity to expected We this the provide questions. the call economy for have lines better open now when turn appreciate revenue for Operate?

Operator

Sachs. from first comes Our Jerry instructions] question with [Operator Revich Please a proceed. Goldman

Adam Bubes

Hi, Adam of my on this through you year? level are prices Thanks was and that QX in in if folks taking market next accelerating talk the able about put you questions. could above wondering QX, Bubes Jerry price up, see core range for X% in I X.X% today. October, you for the you're of open if do putting potentially that to is

Worthing Jackman

at Well, first. I next look year

between said my remarks, pricing As expect closing X%. average we X.X% next we overall year to to

like respond said And in need And be through said, range now. see moves need performs and that between rounding anywhere see, next above if how so as that year, doing franchise, we've right don't just X.X% the got X%.yes, least markets, we'll I'm of we XXX and year obviously the pricing the again, macro our look, points X% open we before, going And we as it markets. XX% in stays accordingly as but for also, next X% business this price next go if about year, at alone on again year. that's will average our up about that's in basis a you the that and competitive that

incremental adds that And pricing. basis points it so that's from total XXX basis just contribution and those point XX% weight XX franchise the a to markets

we're already next right that to X% in So effectively we X.X% rate look to year. run as now

Adam Bubes

Great. targets of you think how sustainability opportunities plants? you by That's Greenfield much pursue helpful. existing talk I tons be ramp the, investments from about recycling When to is then targeted projects. lot. think to achieved about in versus million Greenfield report, projects in And your to $X.X that get Thanks to XXXX, a going

Worthing Jackman

Yeah, well words, new biggest facilities where will jumps Greenfield facilities spec the attitude. it type our of come drove have tons own where capacity combination the facilities, would now on dump these just aren't already This where they and we're patrol a build economic be pursue volumes. to targeting facilities, we new make trucks the to isn't is we

jump And see And in, up so you'll be will existing the facilities obviously bring numbers those build see facilities additional you'll in markets. in continuing again. a one continue as can us to to pursue acquisitions recycling new couple we in That and move markets, numbers. on

Operator

next Please KeyBanc. with proceed. Eastman Our Sean comes question from

Sean Eastman

Thanks like considering team. us for implied my here. for feel bridge margin tougher. on fourth the are Hi taking that's just Could pretty cops quarter? update the I notable zone the in Excellent questions. the you margins. that Maybe just in expansion

would Just, in quarter you start. for a be the as just context able guys some there would, been fourth to have what helpful do

Mary Anne Whitney

Sure.

change And QX. question between it because I does great in those about down a last tailwinds that's in if QX, XX QX. lot in at change step points by look of QX think call and a did XXX basis those I year

seeing this benefits incremental by are increasing to we're basis spite that price see point, will more and of still step the it that, in points, already of those so, margins you tells of which impacting that that your quarter when up increases, in QX. And you're you margins XX

say that's the So mover, Sean. I'd biggest

Worthing Jackman

but from you because the the underlying basis dilutive acquisitions, then Yes is gets XX. points more, points XX to actually take back which the XX or basis plus to you

And so than shows. it's even cover more pronounced the

Sean Eastman

to waste of then helpful. really that operating bridge revenue if are as look way we And headwinds the then that and juice we and a right the Okay. we to maybe E&P any see about holds XXXX, need leverage a consider? level business think in from it? perhaps Should solid in up, is normative little run there that rate out That's pick continues this to

Mary Anne Whitney

days impact. for then that. P recycling that current of And when would, some Sure February, think to and in and, course guidance the come I'd year. that would we that with, have margin if were that place in, AC earlier next We'd lower have we'll course formal underlying of there I in to that sort RINs, Yes. tailwinds as waste remain solid your say the the our remarks, those observation, to you typical give where and the of already are it's an would things but we'd pieces levels margins think expansion. contribution, layer early associated about E with extent at and and then, to in, be with and And at in

Operator

Please proceed. from next Our question with Mazari Jefferies. Hamzah comes

Hamzah Mazari

New and up below also Good, expectation, XX% maybe my you was low Overall lot I are call today as conservative, the good volume on away mentioned you. over was you Western makes than York margin just further side, then actively about into strategy Could, I would but that, talk But a X%, sense. I the were was volume. what, just part price side X% just weaker? business is above slightly the up you was volumes, environment? better growth. on your which walking And, that in of which volume anything guess, was you first this morning. know Thank out from question volume of understand maybe what looking My, volume leads.

Worthing Jackman

had Right. can one that And all to year. X% are the lumpy, waste growth volume the be next. due can from the that special to move in regions period that comps two Sure. sub fire

X%, comes Everything by right? so growth a on And it a region issue that's the when just to two side to timing else and to, to volume was half regards comparisons, with a would basically margin we're seeing away, margins, is people. have underpaying that is low low which strategy what because what pursued more that you're growth I companies of revenue, walking say

are with infected like high turnover is those lifeline or a companies. oxygen you're provides This So environment failing. the not to that that companies

more right depending inflationary we people the in right the folks us you. sure saying, to And in term answer that's point cover is environments, satisfy like pricing's so going XX% But what to is attract markets market the can you're see now. the to of approaching higher and want what you And, on us? the can than we paying by have cover pricing to certain order be long you XX% the that keep operators, be benefits, you the etcetera. to drivers safe And

have reality And that that pursued. to is strategy because stay a to fault away companies are of they that's And can't to, was the so, to, those that business. walk afford in the the

increases eights, And so construction the the the see response up to pricing current nothing tens, the It higher. price all rampant products, look consumer compared in XX% materials, X% five in around utility to just significantly. Autos it's half is is or economy. are That's and environment, the you, you talking a bills.

think the is rebids. mean, so of that five And and process those bulk things there that on We before the to had were repriced contracts. transaction. along we, run what prior These both to cases, in years well of it's margins. price? who Would from, him Absolutely. took high away the six we comical two we've, two were and at info. left to progressive we three up the context years five the, of rates early the and we guess low at they got contracts what and we half things, from at in in said had those walk in legacy a took I not almost we because volume us and And have to it's And five acceptable that rebid high. them scheme that to that in, and it's, people below sounds them all

for do not Hamzah, available. on point, we we'll this and But they And how to so don't your is practice. see Labor those. perform plentiful

that them So the we sure for labor we're well a pay going we to paid that have, and make rate fair get that. we

Hamzah Mazari

higher different, in pricing pricing but is And or you're a conservative a shouldn't I know just today. We be figures. your XXXX, X.X. than be but, in was Pricing. sure. mix your sort Inflation's pricing because being then of your just, lot bit X% higher in, business pricing or, higher

Worthing Jackman

to coming remember markets, tied XX% that of or some because in incrementals We what lag know is business that don't, acts to CPI from kind at rate got we're we that exclusive local volume you margins. almost those of right? the like begrudging that Well, is accretive scale return. not on, The price, because volume it's is to

plus And environment when look volume quasi a as volume act X% still X.X% to to X% so, tag, year, current those We're percent at and in X.X% price. you year as and you, this you still so look acting price the and ahead when that. volume next markets price, of type put price X% on running, top

environment forget expanding printing margins, the a the is, And is more you're where if you're different, price seven or or plus that. this bit so so, everyone's look, growth now the little expanding if about margins, it are, different volume, reality for gets but organic elements in chances accounted X% to you're right getting breakdown, price if than

you're If you're not, not. are, chances

as so the components the not price, much much okay, but that's in buy. as happening it's you're what's the headline, And but that's getting not where of it's because

Hamzah Mazari

it Got it. I'll Last question. over. turn

availability walk reported Maybe just through it one Just your hat larger on on line, inflation, any there. Op us about, seems adjusting to doing I who than labor helping peers. is earlier. Thank your on your of line. issues that like reported That's to talk peers some you but like but are yet, just not it maybe the And everybody's of wages, were just manage strategy better looks labor in today ahead labor of your larger the what was leverage on, through you. you relative the just, labor line you realize your

Worthing Jackman

great year, you the our at different and, our critical We're first the, would hinge in have openings year, retention focused sure making But longer stay and are every step home, Yeah. record more over we no keep time, you whatever past We're to get are resignation, on up other where they hiring all period, I if can our whatever pressures it. over of We're say companies. because a and now, back to call look markets a period, months. the this significantly them that's point. the month. people stabilized to of their openings the, few people anniversary, year number in those up want great, Look, the call than over

I'd similar say all afflicted we're by, pressures. So

the driving think in got have your well, script accept them that, but I through what said, a focus you hours the benefits, cetera, it So as then keep to, we of you've about way played that they're running service and we, their and to reality to it. try of so pay takes the you in, matters, And to on, quality goal price realities the are recognize that's equipment revenue in right? et care to of that about got formation since got workforce care said to office, you

fact out recover our to the to on of it. some to year And early that wage see on is early this we we growth about double to go we I and, when it. might it, you so call and And And to the and respond be we talked referring leverage that down were last doing think

Mary Anne Whitney

of guess outside brokerage because or impact headwinds so outside is that repairs, among asked remarkable pressures. revenue went etcetera. more I translate we out business, we incremental the is much of distinction price cost the have we what those things, that waste recovered on people say what's those to. your component, perhaps pressures, everything did underlying from and whether And about have the more have I to what it's with, that the that you're a double do relying of cost numbers labor now the impact different would third the, other to you kind which to line same that performance aren't the of those other Other talked companies we've parties solid heard. have, digit those increases the because with increases, just add Hamzah labor observation,

be business. cost, If on of other a the you shows understand, people XX% underlying with just different, we take basis the how is much which and increase points, can would've numbers we've why offset it you'd the were XXX your how math simple down it performance suggested of

Operator

next Our proceed. Walter comes with Please RBC from Spracklin Markets. Capital question

Walter Spracklin

everyone. Thanks you question very operator my Thanks morning, and much good for take morning.

and just So guidance conservative were just the how, year. you're forecast next that not lot you, they, markets the entirely where reopened assumptions how provided initial of are is you there typically and, fourth quarter is quite in that into Were the for question here terms of and, a how you and underlying your yet.

staying sitting much I therefore year, way or guidance reopened you that your think looking based your of and Is are I'm kind to everything on All pretty one based they guide back when you're that. is conditions of the markets next into business normal. in on them. assume are is do

your for Just guidance to next the get are year. how conservative a assumptions underlying of sense

Worthing Jackman

control. don't we what assume don't we Yeah,

York collection be no, so commercial New that particular, that might you, any we QX in And beneficial would additional to, be what reopening and we like we, addition, just referenced additive. to saw in activity

into So the it's haven't we really again, have, visibility have pegged really, more And we'll number it's comment on to that. in February, yet. that why to, volume

Walter Spracklin

do change you're on and you great. and focusing looking acquisitions strategy specifically, all to is approach you Is or geographies something companies that waste acquisition, do solid And kind that for more, certain at wayside. more then this looking could and happen, more how something as you, are to you You more waste of opportunities Okay. on and less focus opportunities at types your becomes areas inherit when less a or ancillary a, shift re, turning or at special look waste, That's thing? as solid your of into there. you in at solid acquisition any in more or, could that just you become waste liquid specifically prevail? business, Could, less how start

looking you're next at, acquisition of into Yeah, type the going year. on the, on curious Just

Worthing Jackman

model. we, billion context about billion that No, a private company X basket. Again, revenue, core that's still within of XX fits our runway in a or solid company revenue private exceeds our waste XX

for That's sign that Lois the XX and kind that. transactions. a We'll into much of see sellers lot pick easily so deals converts have of now Canada. that's to we over still ahead in of way us have coast And of Right we in timing do, the run place. coast, we the us how

sellers flex And when it's those there be maintained, so again, it's, decide.

return flow, low So there's this well, commoditized as been services, type, rush kind XX or folks no waste comes continued just there's I much see to that cash solid that. margin us year be that to implications to waste exit is like for overpaying, it a that's when trade free you to this any year. that, And, next environmental better where trying They'll environment near poor quality, of XX quote, repercussions in to still profile not traditional of are than companies described looking term but adjunct for times. sell solid

stay, driven and success stay ahead. our that to we'll the we'll What's now look past we so company continue as And do.

Walter Spracklin

the time and quarter. Okay. good That's congrats great color. on the Appreciate

Operator

[Operator Please instructions] Morgan Goldstein Our next question comes Stanley. with Jeff from proceed.

Jeff Goldstein

Thanks for questions morning. taking my morning. good Hey,

you the, reach. to in mentioned you marks competitive X.X% X.X% prices prepared mentioned So from seeing your ranging the

other So I'm level exactly there rate is Is regions, where higher higher largely there dynamic regions price in mainly higher some other markets? that those in curious up labor those Or tick of occurring? of that if the in I'm well? play that to because inflation curious could as is

Worthing Jackman

called go you cause kind We some typically I Yeah, that while regions of where the percent, in municipal the, is competitive word think what term to have of they as competitive mix. hate saw there Reid the it's out regions in mix the really, those to a of contracts. they're in. use ish five of shorter But

be that tied the within a And competitive so averages that's comparative may you've And quote generally to piece what contracts CPI those got regions. of as place price. business in down the

So issue each those contracts really regions. mix or quote much of those a within competitive municipal it's of how of

heavily higher respect see is or that greater the proportion where The other you also of I markets the with commercial thing add more to mix, would PIs.

Jeff Goldstein

Okay. That overtime over have to the do? we're Just How makes to been hours you able year, or the sense. on And volumes or, increased you've able do then hours control? that should and given with under have feel the volumes continuing still uptick comment specifically to that year in these give seeing be significantly we have, you think you or take are about given there? pricing positive

Worthing Jackman

address overtime's of Yeah, up being when are Are I manage hire look, no that'll week Do and can this that'll I higher could about openings different, peer Yes. field drivers to more absolutely. a distributing we into the trying through dollars year drive we and year. talk Are you drive earlier it's overtime. it to more up If offices? up. versus mean, reduce we go recruiters XX% recruiters I heard wish think more absolutely. it, hire Absolutely. service hours you We're got that? regional over overtime we company

So itself. now naturally this act will will -- correct this

As, as number again, upcoming inroads we kind of a make the get in seasonality as the upcoming of on we little into is into as the lighter openings, further seasonality business. business,

you that see can to. in look And improvement we so as ahead we can,

Operator

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

Tyler Brown

to kind back bit question. want go of little the Ho's just I Hey to to, a

wouldn't And year. maybe that the the XX, just bit mechanics, strengthening half the doesn't the of a the give in rollover half, just little seen from CPI XX, price sight second of CPI line through already? into first you on So accelerate based actually on XX

Worthing Jackman

to to no, you're you means the starting get Right. of low end five and better. map end high probably that at you're average exact it the February, or give Let's six, Look but we'll the and to exiting half right.

Okay.

is As next point entry into you so look 'XX at year, the higher.

Tyler Brown

and is optimistic the very you've something of this close which got is happening on How deals year, think even we out the tax of could we side, next on year, M&A Okay. think in 'XX. hard that And the not I flow maybe you but a below Do then think of kind about about year? you, that you we think to be bit, in sound all deal again, again should that as specter if do these a XX? little Or normal driving case? kind think here you likely

Worthing Jackman

get next right? a contribution No, revenue could the the and, no place at outsized issues, again acquired predict do how So we year. year plays kind the year again, of that's, four size won't natural, the XXX why transition is next estate to see of an There's let's lineage, et there's high issues, and million as next That's in already least year. of year, through, earlier, in so that But X% number place, health cetera. planning, reason in averages, go a year the today still we Look, here momentum in shouldn't enough we to said average year. out. done we and momentum which sit going about that's start with but in year transactions people

that's if so And just the it's that, XX year, of Right. which plus. the of X% contribution midpoint million another another adds

So full potentially in plus contribution the X% year. that's a

Tyler Brown

Right.

their then here to the And CapEx is it full truckers impressive of on I helpful. mean, are struggling even my one That's get Okay. side. my most spend last in.

any dynamics give there? you and So maybe to next that is rise a year? thoughts you or CapEx number expect one, trends Anne, this just number any plan about then Mary can Just two, us you year? how pre-buy you preliminary for talk Do can on there them

Worthing Jackman

the fleet. what half say, Look we our the when And and for accelerator. them to units we lifelines way, didn't certainly put QX. look about this the of planning to outta cut. as we vendors hit. got in but in, we be basically early during we cut look, ahead stepped that units, When had concern wasn't but started We our was already. early necessarily offered fine they me, when were or, folks. dark And year the down 'XX early out in and Look, days year, the just spec pandemic pandemic, was actually, back XX already in it now speculated financial how for We for we do if the to specking shut excuse last and for our let's reached things staff XXXX as dark make capacity 'XX, knew those along could pandemic. they or we think you were, on some on, fleet people sure just when, find cases would in decided the the some never, factory back We distancing when on

age million the growth. get that's growth side another take the no let's $XX 'XX more container some, container budgeted that's markets, year let's at units are to we Now yellow of given then budget, the by were capital, of fleet don't We headstart getting in to the some outta growth. There's put got we to pressure let's, March capital thing. the to had, say on area work probably this $XX but we, down. maintenance get, budget, about lot we in again, so XXX and A same some above off million in they XXX

And again, What that. get think? that and hands you do on units these can being And doing It's so land we Claus like all one always fit had or you whenever anticipated the It's get well, I were very my Hey, an said, capital capital. some for approach almost Right and our units Santa XX aggress, purchases. all this year. specs someone container above it. it. to we approached as Go and these

with more CapEx right say put year, those year mouth So that to is sure her you worthy. Mary Anne's original ought and or down be $XX relative guidance. be won't year means going to to would but next I'm million words CapEx And up, I yeah, in over

Mary Anne Whitney

pocket avoid that's to So positioned sought Tyler what we, question, all to 'XX what ourselves. we've was having we avoiding air to of your how an and in course, to observations

And certainly we a end, from between in the get XX. we and forwards, we more pull as down. prepared now and say year think so, yes, pull extent it's forwards as dollars, I down it that And done, those mentioned further as should and, would of remarks both be to and, revenue of percentage absolute

So that's the think way about to it.

Tyler Brown

as helpful Very perfect. Thank Okay, usual. you.

Operator

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

Kevin Chiang

labor availability. come on there. local, know, lot Congrats these lot and that's and of quarter the government that you not you I'm the just labor labor in that, guess, mandate screen Is actually tight. vaccination is impact growing kind of a federal under questions. you just pretty I umbrella a, good that any of morning, just, are the you my your wondering, on seeing I issue already that mandates force? for my you're, or, a a having be in of taking not saw might a for I Thanks something mean, vaccination this of across having that? sense impact of a

Worthing Jackman

both to Right. another and ways chase so go them chase, heroes call the might labor employee employees Well, to vaccines and, anything private front do put levels things line is essential that countries them their environment, to year, on then and concerning, any you look further right. the year. the, similar race vaccination the in about and, beliefs one pressures can't reflects and look that and you ethnicity can't or constrained look, our country off the force off, try positions within base and call or and them the

at, convenient, inclusive in being as do, right. look what's we And just means so not an inclusive everything

the folks of And views and vaccine. your it. what all to and the so is leadership understanding listening the, that to And differing extends value and we the servant that's employees input is,

is this the as this not look employee time additional base get, in stuff, bottle than kind we'll the needs chain of any a delays so because not of our ahead this when government to large environment. you But an I other and stuff something think all already means exert kind government, I economy don't frontline that they watching see that constrained pressures within and And the probably it's is we're of file profile next, supply of back taken get organizations different and going it. if to want care

Kevin Chiang

the upfront timeframe the margins No, point testing structurally frontline I you of your where the you you how think sentiment Maybe how companies that rate kind because think in medium how a that change the, obviously there. and, into materially I have cost know, the see electric if that echoed Does years? get no of does just, pull just maintenance, intensity I'm vehicles? I and a your but a or on wanting does for then second capital it's given sense. see higher frontline that capital again, it's to impact term just report, early of in by that do and this, to, And this I do know fuel term it margins range it's starts flows typical how question. makes call vehicles, my and or impact run many but, kind here just by, days you just highlighted, looks at intensity from about, benefit of I costs kind positively sustainability near be these you lower up recent a say been

Worthing Jackman

in lot because Yes, we're eventually. issues I only manufacturing over but can't of crossing that units. again right. a a say the first we and state, in delayed right the issue, that's on our two sight almost getting what a pandemic. now, I'd we not year inspection And mean, even, have border now that's issues a

we'd thought we body. to We we'd have eight electric, And eight so of for units still the on have look, a end units the meaning road year by this ago, And would've later chassis we're electric fully waiting electric first two road early year. thought this year, next. the on and the

margin when in first means when capacity Capac operating Right. OPEX by absolutely margins but all you'll, test when, eventually sure turning manufacturing means CapEx, be them year which you'll so, up. And we'll them, escalates, beta but prove the make go out.

things to at on payback down us to you seven down or ought right. to Maintenance ought be most. a Fuel said, nailed be the will year that, host would As six incremental hope, be we you get it. down, of that CapEx ought

need in from trade away to future. prove that's CapEx. happen And five years for in, see probably enough where we to capacity notable OpEx a, change it, in XX having to manufactured you'd foreseeable a of but off so this not going We're

Kevin Chiang

self-fund see aware there real vehicles I many subject And just, this have there's support. there. is direct without government some lot not you I'm you it's of electric tap grants Okay. or a something something to you'd can vehicles is that, to so but, out for any re-fi mean, other of one, out the Is commercial into that

Worthing Jackman

are the if have that to faxed in there for pay back for that'll available, haven't sure. answer we if because Don't we, help Yeah. that

Worthing Jackman

Okay. No, me. that's it and for there. Thanks quarter great again

Operator

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

Noah Kaye

Good questions. thanks taking morning. And for the

been a you long the waste now. how I And your thinking the where the about you market is investment is Just time, this way it first Obviously time. alleviate There's that. wondering labor about would call broadly, constraints giving in of market. do a, of technology a of priorities. your see but help it's competitor in some but tightness question automation, you tightness labor right a ask to to is to about, reflects just Obviously there's for in run whether pressures the in a as business. the potential at propose a manage where other technology business? Merc labor grace just or on having lever these I you functions, you conversation about wanted to think But pup business over lot more labor

Worthing Jackman

Anne in on we out we automate Yes. to that's Mary I'll say an Again, start mean per there's no we, where one do the Look, to in. you looking are one two of Are people yes. putting right? it's the per MEFs the, manual solution, Sure. and chime Are possible take robotics all the specific routes the, robot board. thing to I shift. secret average right. Across in,

I end bought of the to have we so XX robots or the get in past, year. that or, months this as or XX would've you over think months XX we'll

longer already other turnover we're to engagement your folks labor only always got are employees want risky voluntary we're recruiting to following employee, and Instagram hiring we going more but This engage families, So their solve hope and for or behaviour if people in-house that lately. and side, we balance be We well. onboarding us have and chance. up exhibit to deployed with and look do our would improving keep our and we're stay in. want people if to as us I for technology, work not because own stepping now tools there's training stay make We'll with interviews engage our that looking, retention stepping hard is to industry Are help do if but constraints and all you a and or to, you up we that you processes our recognize the the engagement and better on give have the critical, if engagement a drivers. basically to people things, involuntary to for we and can improving we on life our work

can, we do we the, to we'll investments side, technology, improve So that's solve our and our easier. can if would employee there's we're only not answer with that answer, engagement one it no we to our be If engagement the not but need because digital all people trying regards on that. we four keep ability the, the experience CSRs our people more customer XXX the we so and customers to Right. doing with lot with on to that'd don't XX to whole a do the but month. but we from locally. a expect machine of anyway, we can spotlight the and to to XXX, That's can hire got our look all you connectivity

you setting the of click up dispatch, customer regards CSRs, to to touch, service. goes never So always just dozens online. order it's with post order sales never initiatives you where right the for never, have It including we rest are touch there can

where And the a upgraded safety you may fleet focus PA our is we our all standpoint, and which against And course priority, in, through as people only that's I an been whole is working our from the on of have approach. add working that it's working again, our, thing So were number one, camera we're safety recall, above as, would that to. the in passing our of employees. on and technology the out

Noah Kaye

clarifying for I Thanks a to just quick ask And Perfect. answer. question. want that

for You solid expansion next underlying commented margin waste to year. expectations

comment might to that we caveat that waste be make factor impact movement there underlying want acquisitions, of smarts? the considering Just should is dilutive or on other would contribute to be the there the south sure that any in

Worthing Jackman

acquisitions, point, your are To, referring to margin the impact of No. we dilutive

Noah Kaye

or So it's back. costs like anything that Right? coming not discretionary like further

Worthing Jackman

think it's again, a normalized No, more we environment.

Operator

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

Michael Hoffman

So I talk the to just about business general. in want

service you interval upgrades? we So new Are getting of in sort that cycle? we seeing of part are business Are formation? the

Worthing Jackman

Increases in competitive and growth of relative new We our Yeah. and, look budget our that's excess decreases. well trending net well business of side budget. are on at to ahead sales the

answer. short Yes. So

Michael Hoffman

half. momentum the was second to that building Okay. And

we're volume favorable as much carries want, buying know things first are the And talking not that price some it through So guides, but about we've around I absolute but half. macro you as got

Worthing Jackman

that that where EBITDA reference renewed, favorable. dollar Acquia and And are and they are, for Well, have macro that's some should not again, are be we those and, things us before us. as rebid because margin I contracts then those fine for and,

Michael Hoffman

that couple there, a of a event they're I a there privatizing, willing from as they're start different having group and labor is bit hearing get wave there meetings out that. I trade muni vendors little small have been or trouble is at hearing is market small that so much to with well?

Worthing Jackman

talked are, or are P&L pressures when, it's external that's it margin, when percent look be a called start, when their or margin. as whether clearly Again, pressure. as providers low are, they focused, that are a much adding revenue moving to private wages I pressures Well, municipal before, companies as XX XX% up hundred in of their all

XX% weren't do municipalities it -- respond to to ready required I do to of with clearly regards dynamically privates or my wages saying surrender whether so how it. I'm to drivers, down And be they

that be question in And we'll the so bit, to little but see it's, incremental. That's that's your not I surprised wouldn't mover. a

Michael Hoffman

so of the think can, And on may It leverage we in, then get being of I date the dilution. primarily that. tuck well anniversary and a M no, have year side to integration, to pretty when you as it. anal the Yeah, most healthy

Worthing Jackman

Well, And collection those yeah, talking twenties impact to throw something mid the can XX%. it's standalone. if this These business. resource it more you you high or we that's heavy know, obviously the look on transactions of, the, margin. running And was environment, as, impact the, in recovery on XX% about talk you acquisitions. just major about at the you're keeping where of And standalone separate a the It's, the approach of are P&L. it oriented, a got recycling in can

that's The extent move If right. in mix well. as the And so the tuck-ins, that the million And in revenue are entries hundred to we've tuck-ins majority tuck-ins already transactions that, vast because what XXX of again, obviously already. XX market mix, and acquired themselves. done the standalone a new versus Don't needle were we just tuck-ins of

Michael Hoffman

you trying was protect of there's can't to you able Okay. next different when to we you RINs control because a That's number year. they at. this, the is the RBO up risk do what if downside I And the part -- about beside what get are, are where to then wake think there

So you what doing protect are try help downside? to the and

Worthing Jackman

you saw locks place. Michael this to year, in some in hedges what us do Well, was put place, some, some

for, year instance this for And has so locked. been about XX%

as the will going forward. doing consider we same look thing so we ahead, And

Michael Hoffman

internal Okay. rate inflation? me, you is current what on can And lastly, run for the of the then of cost frame

Worthing Jackman

XX% mentioned, And instance. the And I And mentioned, experience Well, line think say. as seeing increased. just those year at at and that the, similar And other standpoint. we a digit total the really wages, we from Michael, echo but the other line I double Not not of heard are we'd as, made it then mean labor, year, just all-in overtime lines. can can wages, then what our people we're what capture over reference third I look be we've will all at as instance If which plus the, items I, labor several Worthing I as cost our subcontract, party I earlier, say, may, and items, there's look is temp, increase. for look whatever specific case very labor as benefits, the

just top we up line we the recovering I Even to which it's basis they And switch is where on quick so price line that, the have increases year. on incremental on important. getting were why then and are mean, buckets and of Discretionary several a be the the XX% if it's, flip top it's again, so of dollar last to it

as to, As in we off, the were who in quickly are many of an That's saying, culture. want important turned on element to we teeth the those as business. kept we costs back the we companies in pair of turned them pandemic, on them back And our on. we discretionary back

the saw that you So impact quarter.

top on inflationary So of that's those pressures.

Michael Hoffman

All right.

in people my the So five. you pricing a should inflation That's four top happy you're could head. we cost of off be plus put internal Therefore something at to

Worthing Jackman

Again.

to, again, year, margins in have on just peer improvement ourselves and QX we business, QX stands the sequential to it far over and to what in compare given So one year contrast.

Operator

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

Chris Murray

Yeah. Thanks folks. morning. Good

Just in going back about certainly are, through we've commodities lot today better, it's making and your think gone favor but it a moving business, cycles to the a recycled couple are now.

we how how some And price or discussion just it. is the of around, structure you business that

aggressively something lower? improve Or at a than restructuring go you're when if, looking wondering were prices is you Just this start order. more maybe looking maybe lot differently maybe when, pricing, maybe contracts year were at ago forward as we that, a

Worthing Jackman

set off contracts. of XX% would long up how many of that about process our Sure. we're to it's that and come we and were the are remember recyclables important fact for the in I duration Chris. in, own markets of trucks morning, say that Good them recycling

on so to we've framed by in projects. worth them We've really recycling de-risk and the We've wasn't we're our it working with And Greenfield recycling we've as facilities. is to it, of restructure the couple but way an cases bringing a done some facilities. distress facilities as they acquisitions up internalizing that some came opportunity bought own or earlier, there business mentioned contracts, the approached

how sure we're think areas up, and, the and, set making on the to good and specific the And that that about industry we the addressing direction. moved in we, market overall, it's that's how has we're and So improving business our a it's thing a think rational and control. we we customers

Chris Murray

of But getting of the in is it some opportunity, off risk, any maybe interest to there maybe Okay. this wanting environment in piece further and folks commodity some laying look that at more

Worthing Jackman

consider with because that. would've franchises, the glad the the commodity given revenue a coast 'em protractive of the look we very of time. contracts lot considered at contracts and past way long, the they're time a structure, of of I the wrong at think those I'm we value hedges been haven't said, hundred sits, in I where duration the done the west and we're changing those this when and Yeah. and As this we wouldn't aggregate, We've pleased percent

Chris Murray

we're EMMP that, on this and Fair enough. with business, and right now of fact today type be just different profile? talk on like you dropped. next revenue running turn dropped stand maybe little switch at this moving comes the where point? a new making think we the peak And is pause in just plus us a XX to bit you you Where could, then in commodity call business the Can And some of like a in some just for price to remind Or really the do one think at capacity? did E&P year landfills light levels off you a a that would the had business be up. of million quarter investments really I kind guys and about maybe started numbers. your and some thinking that you we're Is capacity? one there could point point that step at And, way about at activity as as, should it then something

Worthing Jackman

that. many the we not CapEx it seems routes constraints XX like drilling capacity drillers for to towards back not been going there. and above dependency slipped the fuels up? heading likely. function it's probably so a and so Yes, noose up has to of But, go higher crude most drill of continue we'll No, have do activity right fossil and around than these Is that

they we're a that that, go as But only issue less than of be again, a have to it show Now late what the to spending right question cruise don't reference quarter, we And a and we do mostly still peak. or our can by now that patterns less this. and going It's you your think not well. this cycle than the there cetera. demand there's is do, the get called if capacity, constraints we of we're extent a open says pretty got the customers. to we the the than if But, peak. now. up do there. half two and is to of thing we'll for, third of, out oh, of do up, we're will et answer capacity the most quarter And to or XX still the as to constrained to labor the for quick or still sitting rigs less facility, a to getting getting a no We'll I labor, to right But that's rigs XXX additional but lady built cycle way not they're capital need back constraint finish issue that do not That's that's, XX facility.

Chris Murray

Thanks helpful. folks, That's right. All

Operator

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

Worthing Jackman

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

Operator

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

Waste Connections (WCN) 28 Oct 212021 Q3 Earnings call transcript