CWST - Earnings call transcript Q2 2020 | Casella Waste Systems, Inc.

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Joseph Fusco

Thank you for joining us this morning, and welcome. With us today are John Casella, Chairman and Chief Executive Officer of Casella Waste Systems; Ed Johnson, our President and Chief Operating Officer; Ned Coletta, our Senior Vice President and Chief Financial Officer; and Jason Mead, our Director of Finance. Today, we will be discussing our 2020 second quarter results. These results were released yesterday afternoon. And along with a brief review of those results and an update on the company’s activities and business environment, we will be answering some of your questions as well. statements know, may remind future under make and constitute you remarks that expectations, the as of prospects, we purposes Reform that about forward-looking XXXX. Private first, Securities I Harbor Act everyone must various plans the Litigation But Safe the of provisions for the company’s recent discussed as of various most important Actual results those report from of result materially annual Risk indicated by section including XX-K, a on those in Form may differ those the Factors forward-looking SEC. which statements with file on factors, our is the

In views of and as today addition, subsequent statements any relied our representing forward-looking represent any only as upon be not our date. of as views should

today’s with generally financial comparable with to begin they non-GAAP measures, our of accepted I’ll Reconciliations directly available extent unreasonable referring the will so most While Also, obligation These turn should are available to relied disclaim we call, accordance appendix which of we to principles. may in And upon if date to even prepared to not Casella, the without any effort, is to as at the not GAAP be subsequent forward-looking non-GAAP of in elect available the These in we representing investor to be who ir.casella.com. that, presentation, future, views any this update forward-looking during measures do are our statements as views measures are it slide the Investors point to our the financial accounting change. website specifically today. statements some our section at will John over in discussion. non-GAAP measures.

John Casella

dedicated XXXX To and Good our second our with, would conference thank and morning, I Joe. to welcome to acknowledge like Thanks, workforce. call. sincerely begin everyone, quarter

safe, to who the to to did And frontline efforts team Their workers special to job they business effective The possible it on challenging with this a and customers customers thanks the a with company unbelievable hard in along that employees ensuring so the serve. services and the through and our work to communities manner our management time. – business diligent continuity. the could focused safe, remains continue our service made an provide this well-being keeping of people provide communities. along Our essential we

as throughout tracing, distribution We’re meetings in-person done transitions. the and the Leaders to a implementing nimble, and job organizing, orders. observant limiting distancing, social communicating, it guidelines disinfecting company working-from-home and PPE, travel state have relates measures, top-notch contact mitigation nonessential procedures, CDC including of

exceptional that we importantly, flex scaling the this needs to efforts operation key costs. and us track sales enables customer well. we sensitivity with service service business Our only sales leveraged have maintain with not responsive their also have and customers, relationships teams our our variable strong allows a through but and and to number us to have flexibility interruption and metrics it thus limited our have cases resulting as and most right-size their in Further, monitor Overall, period, of interview reduced needs, service sustainability and been our and operational far. operations. customers, This to their experienced our of proactiveness systems

by against solid the X.X% results. in business Moving environment, of waste while this apparent our is our adjusted strategic to EBITDA within by volume-related margins. resilience and the with coupled COVID-related headwinds, expenses, the challenging volumes key we COVID. the quarter, year-over-year the expanding Despite execution significantly in Nevertheless, improved initiative were other impacted continued

It’s ratio $XX like well X range. within acquisitions XXXX notable in have closed have maintaining approximately we annualized on of I improved net adjusted that We free while also highlight targeted six flow April. revenues. would cash these closed with our consolidated in have also to-date the since that to quarter our acquisitions million leverage of

to about pipeline our pleased proactive with Overall, are growth robust. pandemic. response positive remains acquisition improvement our operational very excited response strategy Solutions of the we programs, pricing to against We and be We continued COVID, Resource business, our capital within discipline. opportunity, and our see execution our effectiveness growth continue to the our

result continued XX% Next, our In I anticipation down as COVID our will operations. in of effect on quarter, strategies. as disposal color key recent dug the our of across volumes, were flex we could the some operations move costs on where the well as of nearly in on volumes to performance mostly of our against Disposal a lower we economy. the execution

much landfills reductions As cost safety job while our collection team a protocols. Through we on focus maintaining July, did landfill compliance sequentially. operations our Nevertheless, you and operations. tremendous seeing volumes know, with heightened are prudent and have up higher cost fixed slightly a

seasonal experiencing we we typical usually the However, the not ramp are summer during months. see

the focus needs of our Our remain meet will customers. that environmental central providing on services

we’re our to North Hampshire, to approval strong application We continued with fall. our communities, in our for A X. mid-March, continue re-filed host Stage Landfill disposal application will to of continue permit quick needs have a obtaining in recently update us final complete, will administratively we Permit deemed New was on relationships hopeful stakeholders. allow the for by in and and to Country that our We develop expansions meet aim success customers society.

negatively as COVID, expected, the the quarter. were to business, volumes and over with down year-over-year. were XX% volumes to Collection commercial shutdowns, Now lower economic activity impacted related in industrial Collections levels

collection and However, increased overall due quarter. year-over-year volume improved EBITDA of the the rollover in collection acquisitions pricing. positive to revenues margins and win, the effect Despite adjusted

during we unprecedented have our this and flexible customers proactive with very been time. mentioned, I As

to in diligently modify incidents some compliance, efficiencies. suspend quickly and We able costs, of to service teams Our helping overtime on better cases. levels. needed and safety initiative, routes as labor costs focused ensuring while continued reduce success excellence appropriate levels, worked were levels our all optimize to is that modify service to in actions These us enabled such where [indiscernible] operational which service

needs Solutions, This will segment realigned Resource customer sustainability we called allow teams combined better and business, us and organics by time and to over back to force better Solutions we solutions had quarter, Resource led where customers’ formed on Resource recycling in year-over-year. into and organization newly leverage the to and recycling, office. The ability our our improved January, through meet organization strong our service one our margins another EBITDA Moving sales adjusted Solutions.

and working end well, we mitigation to high-quality focus operational producing Our and on products. initiatives risk programs are continue

back with adjusted measures, remain exposure processing cleaning of lower risk Solutions committed EBITDA lines safety experiencing business Within etcetera. even by activities employees’ while Customer distancing the as effectively – We during We to commodity recycling of sustainability ensuring growth as combined and the reduced increasing have along way reducing Organics well needs the due our our the passed equipment, well to risk customer the meeting our Resource performed customers. to through economic the quarter pandemic. also Solutions,

Lastly, our I capital strategy. would to like highlight growth allocation and

completed more In As far York in I million July, quarter, mentioned $XX a In on we six we approximately two York tuck-in XXXX operation the market. of transportation Rochester, New acquisitions, operation the and revenue. acquisitions with thus New in we annualized in a two Central before, acquisitions. closed tuck-in completed

that months continue few COVID, be the execute continue cash manner are down continued grow there to have response of past business in and months flow remains We well to were pipeline we trying sizable further to are past able teams the process. free sheet and over and we there few employees will positioned Wrapping still along a The to have but will a as initiative. acquisition incredibly of healthy, opportunity against our believe seen slightly drive growth. the up, disciplined in help our with – special with Kirk activity Board. to further Together, the with on been, balance we’ll been to as have be slow I We deals to to close communities some proud performance. recognition and of Ned our dedication the be a Thanks culture. company’s to core is back-office walk for of hourly of employees, have our our helped to the over our through financials. crisis. the execution We important an Rose employees. also to will keep exceptional and and Rose business. paying skills throughout onetime we the perspectives work And and to running representing incredible would frontline In who values leader that, again bonus Board to our us like it welcome turn brings our and to build Stuckey this our

Ned Coletta

X.X% in quarter you, $XXX.X year-over-year, with the $X.X Thank John. activity. by change the or acquisition million of driven X.X% year-over-year Revenues million, up were second

XX.X%. Revenues April up though, X.X% of roll-off price negatively X.X% year-over-year volume line through of XX.X% Landfill X.X% losses COVID. volumes Solid price April. landfill a with point as volumes business with the waste XX.X%. Landfill in and low volumes volumes we June through volume projects with hit X.X%. April. from year-over-year, In as June revenues in year-over-year X.X% low up down down in XX.X%. were we growth volumes from X.X% we Revenues tons we and of losses of disposal acquisitions the business COVID-related line down down up X.X%, were of saw business, X.X% sequentially XX.X% down were impacted year-over-year sequentially were in up growth and point down collection And by were in both commercial as from line construction April of and tons, Collection from COVID-related economic activity the XX.X%. hit business, up were were pricing acquisitions up the the saw line down

XXX color adjusted given quarter. on $XX.X the volumes about Adjusted our to decremental. had million largest moving were of or $X.X $XX translated were little This year-over-year, and million note, a May the year-over-year. EBITDA on of with commodity during revenues partially quarter, growth about volumes, waste organics XX% pieces. pricing. EBITDA an lot There impacted pricing, COVID-XX. up in Also, Average the roughly X.X% volumes; up in was business by year-over-year. $XX costs cardboard quarter. margins COVID-XX of up these quarter in up levels ton up Solutions XX% a the give a X.X% in during in second into points But the revenues basis mainly to up more year-over-year that COVID-specific lower Adjusted XX.X% quarter, on million in is year-over-year contracted we by impact a million solid was mainly of million The lower EBITDA solutions XXXX, pattern. I’ll newly X.X%, headwind $X.X March pieces commodity July. a comparison, the customer our metals pricing. on cardboard a and Recycling with up sequentially, revenues ton hit XX.X% per X.X% contract impacts. were were has pricing were plastics tons mainly nearly which offset and new peak back please higher X.X%, normal driven seasonal year-over-year, in dropped the As higher with Resource offsetting landfill up quarter, were same EBITDA with down negative $X.X period

positive the business of reduction salary included hours, costs as reduction John used and increases, to tools effectively our across spending hiring downsizing and through flex our intelligence side, to track layoffs, all workforce proactively we mentioned, overtime, discretionary the key parts revenues. This of freezing the business. of On lower limiting indicators the

pricing across our intensity business to worked maintained the waste our actively adjust business. needs actual the reducing during given the costs lines we levels we discipline service in recycling addition, environmental to our substantial customers and capital Instead with ever-increasing of of period. in to all pricing, regulatory In

adjusted year-over-year. the in partially performance The of Solid offset Recycling to positive was last was lower XX by adjusted months, million $XXX,XXX performance year-over-year. for collection waste business, the disposal the business. $XX.X the Resource in quarter, increase in mainly by year-over-year, due business. line quarter, quarter, Net was the million million in of year-over-year performance the $XX.X which up driven up Solutions second of great the acquisitions was EBITDA impact income rollover $X.X was $XXX,XXX completed line in $X.X of million mainly up EBITDA higher

our to cash please million in year-to-date This quarter cash However, was assets by higher XX. up million receivable. year-to-date, year-over-year, provided an year-over-year was income benefit due acquisition. was year-over-year. and last great activities million liabilities, Adjusted June up provision operating $X operating we $XX.X of $XX.X taxes million million note including accounts that results free as was the $XX.X had $XX.X for of headwind second $XX.X Net a changes a in flow million $X.X and management driven million the our through tax positive by year

to at invest planned synergies drive newly continue the in and efforts. during acquired operations We quarter capital operating integration the expenditures to

expansion landfill Phase In development Landfill. to we in Waste addition, continue USA X also the at of invest the the

to from name normalized the to of metric calculation The free our cash from This while with we flow. is cash same note change. same. the just our may free this be adjusted to remains press at measures made more release, consistent We change free press changed the As time during you we the cash release. disclosure name our flow a non-GAAP the naming enhanced quarter, to peers the industry flow second our in exactly

our have negative our XXXX, the year. of financial stable to for we strong our As reintroduced improving press date ranges modestly impacts on put yesterday the increased execution noted fiscal economic quarter. assume afternoon, environment the The of on yesterday to in given with COVID-XX our coupled remainder business, ranges a our out guidance we release through for the visibility guidance

in from stay-at-home down note remain I the again the to that flat lifted April and year orders However, normal our that We the our adjusted orders very they not and business trend recovery ranges and experienced of to for like contemplate many is activity has the the relapse a guidance remainder businesses that contemplate first do summer resumed. activity Northeast. activity new from severe through COVID-XX second would in EBITDA late will or rapid reopened This the economic commercial shutting activity as a generally growing mid-June third of quarter. construction months. were during seasonal stay-at-home versus typically business

services July, XX% will due or seasonal businesses a estimate other not from back in that resume. commercial/industrial the to However, this were another and to business been normal We third To-date, reduced quarters. we flattened when rebound XX% roughly seasonal COVID turned that somewhat the the suspended fall XX% second has have do to uptick of on. through expect schools and return

through is remaining costs fuel expect However, year, XX% disposal we costs, the increase certain business, of Thank the of line you. of such it Ed. higher and the that, services expenses it when to in operating costs these due higher remainder on. back to resume. to efficiencies even collection XX% Further, operating will as lower medical increases, unclear to the those With traffic turn will come higher I as services over

Ed Johnson

morning to like presented hard we a Well, the business this pandemic our Yes. challenges the quite anticipated. never we The Ned Thanks, good unique our in where and it the proactive recognition better have to was quarter one. were had by that everyone. so operational predict effects of than end quickly resulted we’re much execution to but going of up, a and to team cut costs outcome

the Even and hard a the drove improvement to can. the that margin learned business. basis you the of future volumes of a about some while point of things cost doing EBITDA It’s to to near revenue improvement things adjusted important We we XXX much protect also of here of in some few year natural may the of understand moving it be basis margin. resiliency and as predict as ops, QX pieces by we’re percentage the realities to improved as due the the points compared XXX of economic down with COVID, last

the margin our improved starts talk But Collection. the We they our I’ll protecting protecting team some lines people about and focus to also hours unanticipated proud customers time At operating business, business went been roll-off reducing done between tightly only the in the not in the so of in for have done we increases the accomplish. Our the customers but same saved and customers. employees budgeted hours. major earlier benefits streamlining our our our jobs both cushion daily commercial at quarter. that to helping also industrial we immediate costly our construction of by from and time, direct controlled our labor were in minute. XX% costs our primarily the able the from year more start same year. we Where reduced labor The largest hours We great employees of pricing also costs, workforce had staggered the safe. from on workload, areas exposure benefited flexing crisis, of keeping first suspensions adjust the price launch. our but in service morning, a revenue. a to pulls and has all what the At redistributed that and our for to remaining improvement save to lost cutting have overtime I job possible, for remain of extremely were in was discipline was

were from through when effect. So up X.X%, with we push did customers the and to pandemic, PIs primarily rollover not QX have collection the reflected dealing pricing

evolved, that things the the we costs. This benefit, earlier, to was urban routes that a first noticed getting of were we obviously as more unanticipated realized our orders. in and particularly even residential markets some stay-at-home the significant us finishing As were benefits, operating saved from we events one traffic our

As seeing it’s very traffic to return will predict but traffic, normal. stay-at-home fully orders some are are difficult lifted, we when to increase in

Another weights, as to weight pounds timing It the weights. I in seasonally in per weight. in to and said on account and residential normal is April the an predict and proven revenue difficult last This the partially returning was in commercial increase to base. in I commercial in remaining produced revenue industrial stop. This helped a only was the wrong the a resi the and XX% resi offset of call, know quarter increase the that disposal increase normal. weights commercial the data in early benefit was reduction reduction Yes, showing an

push boost and Lastly, various the adjustments. over for at as past we we’ve equipment about more comments appreciation and retention the drivers, to other past at rose. increase the customer operators and drivers scale paths like were an was net our pandemic our these and career you customer their were the employee increased we feedback, year essential care promoter back our our including where customer positive had related route in costs. by through the in which service This We positive customers with reduced so, progress our level programs home, that increased appreciation quarter. market-based or pay quarters, and showing and pre-COVID. was score. found may recall great social in introduced of the heavy center, job With data not health from programs a unsolicited significant And and mechanics There concerned possible, safety, we turnover media morale interrupted materially on workforce economics from that track coupled an we stuck their

We are progress. happy with the

not our on future to enough EBITDA is are much than provide a We of how comfortable sure all collection harder going to are is moving do predict. with permanent normal. keep all workforce our feel do turnover we this the We to guidance, happy to pieces and but albeit near slightly these With side, the larger improvement, down. though a little we adjusted a range can

On would volumes the side, down the compared to as or landfill second our year. XX.X% about quarter as XXX,XXX were be last tons expected,

is part cost. a recall With Landfill by structure, basis you reduction, cost to our many price General revenue Ontario operating X.X% over improving XX.X%. As of operating reduced new as Part so a shout our returning at you good. Johnson, efficiency landfill the may squeeze, to QX margin by the the has and Sanders, positive Mark only year. team improved of disposal back are rest investment improvement was would Casella of year give that but at site the Ontario Landfills; a of we our largest points. market I made of more the variable driven meaningful site. in Landfill, the significant special the expect want and a And procedures, primarily VP landfills Manager Operating high average manner reported, as ops Though have was this not compliance trends a cost Ontario the changed our XX doing our of to the for out price but improvement standards, low operating daily and up and of we price. ton per dynamics site, this fixed is that Brian cost both up last Northeast, in percentage last the in

the Now volume need return. we to just

within includes from in Solutions Solutions in exceeded Our to on amount despite great group decline. due Resource Resource some as service the over we point processing with budget expectations our of protect for which of cost a last benefited to our business. higher rules original also each prices line our regarding balance ops comply the both This the virus. changing operations, and that exceeding went employees to both revenue of group the a well, health outstanding the had volume quarter, average and of changes of put with prices commodity states rapidly accommodate operational price customers suffering to year. only the needs and XXX we changing guidance operate an expectations, their suspensions I long-term our while minor Last and slight quarter group bottom detail to basis recycling into higher predict a of improvement The place

these the our want changes back for would and start are Thank appreciative operator turn now an effect. more reiterate to awesome be said to of the and I doing team. it to you. people – then, in of job, I remain I couldn’t like All what I to Q&A. proud the

Operator

first comes Our from Instructions] [Operator the Jefferies. from of Mazari Hamzah line question

Hamzah Mazari

morning. Hey, you. good Thank

John Casella

morning. Good

Hamzah Mazari

out, your timeframe you segment? that margin Good are as again us buckets just large realize margins to margins, waste first just waste remind see getting about from we that the when question what basis at has I timeframe, that morning. points. talked those what you My you up, pushed in look potential close see COVID, is solid from COVID XXX us back improvement but solid had remind you stepping Could and aside what pre-COVID, just potentially maybe coming that over in

John Casella

Yes. Thanks, Hamzah.

quarters. we the enhancement and flash really you seen. if in the business largest. with Labor business across also have for and a have more labor a go probably a in And business, had tight career higher-than-normal we XXXX paths back right-sized wages And create market. started our pricing We solid the to to was and turnover early the quarters, huge you effort to the entire to large for key last several XXXX, margin across we few translate had our as Over were headwinds some inflationary waste suffering of through employees.

dynamic and program, then and routing, in excellence goes it’s it’s And Ed excessive look pricing also late that margin more inflation started across service other a our improvement. seeing closed and job We of where of and focus in great our and from and at the you bit around we kind somewhere to also Southbridge a our is in XXX did pricing, other programs And are disposal, margin to these really were quarter, incur fourth XXX shifted business costs. working And push fully had areas. anniversaried of We as transportation It our to if basis of It quite key the safety areas focus the points we are line the through this pre-COVID, getting lot business of heightened acquisitions. a through sites team some costs, across Landfill improvement tons to and there’s XXXX. in efficiency inflation. that inflation of we transportation by a correct we the this underlying his long-haul operating on of employees. roll-off general our leading; building on programs, blocks

bringing had period at pipeline, where new the have in of a of we acquisitions we ramped up lot lower margins. we As a acquisition time are

a on platforms. number operating to it the of quarters taking So to integration our was and us get generate synergies

see that, as cadence they and a We have a are more system. into well as we of come benefit our to starting gotten positive to with

drive lot we why the And margins years, a those margins as over from moving believe, to there to waste but next COVID the of the the quarter, are several solid point, XX%, pieces range ability an complexity tons are we there. underlying of pre-COVID your is So, just still high improving to reasons up to XX.X% our XXs. has in there.

timeline we believe can specific a do we given haven’t but We that, on that. inherently

Hamzah Mazari

helpful. with it. on going waste-to-energy area. your a compete lot just And a pricing question landfill of you Very Got guys just plants forward, in

us for it do as for waste-to-energy frame just the to it is that waste-to-rail Is just see the about pricing? what Is dynamic? Just how us, get regulation? risk you think landfill it Just plants Is more very you aggressive? expensive? frame

Ned Coletta

Sure.

even the facilities about all summer waste think season, out they of realize, from a the cases, Northeast, the of a of bit have it, I But of are of of there’s suspect Hamzah, all Northeast. – moving I a economic in lot going into have today of first Northeast full. obviously, thing – little facilities is of and full. standpoint may the reality outages contraction, that down, they shut in the out be you that an the to And the the economic waste moving waste-to-energy a lot There even of were COVID. COVID, volume lot with impact from are those in

anticipate the that volume. – I of terms in I there think going major wouldn’t So seeing I don’t issues incinerators after – any

more we have are activity see that two. likely a pricing standpoint over from seen last I as we or consistent year think to the

Hamzah Mazari

quarter. And it. I to were last was compare Got What What Thank just I the XX%? you? over. down turn to question, will relative for reported that July July you. just the am that, XX.X% for to you trying it volumes

Ned Coletta

Yes.

volume from had And in We down what we said strong and our year-over-year? through a June, little little haven’t June, I July. a then July. fully as generally of do really for trend kind earlier, books you April kind volumes out bit a know, have late closed But in bit the Jason, flattened were we of

Jason Mead

July, if in second, Yes. in we trends things focus we just for are said, few the on weeks. Well, And as landfill in seeing about similar tons pretty perspective, June. were tons as down we from of X% year-over-year over Ned kind a landfill a last stabilized have much

Ned Coletta

follow-up front have exactly me. some I more of specifics. I get don’t in and could

Hamzah Mazari

much. do Yes, problem. offline. it so we you No can Thank

John Casella

Hamzah. Thanks,

Ned Coletta

Hamzah. Thanks,

Operator

the from of line comes question next Raymond Brown James. Your from Tyler

Tyler Brown

morning guys. good Hey,

John Casella

Hey, Tyler.

Tyler Brown

follow in by broadly Ned, chance, change want July, on just there? have I to up just you, Do maybe revenue the that. back

Ned Coletta

No. in up, it But June, I I just June. pulled have

revenues at So if of solid was our June, were waste the we the X.X%. business as business month around around a X% up are looking year-over-year up and

losses bit. as X% the to volume ago, pretty And to we similar in a our trends solid minute X% So year-over-year. are said about waste July They down were business, June. the a moderated

Tyler Brown

Okay. Appreciate helpful. that. Yes. No, that’s very

Okay.

big prepared guide second obviously half color your the my question you first number. versus gave is the So in remarks. half And again, guys some great here really

So first like, comments. a low, sequentially XX% it, help the I there prepared I gap? are that I Is that to historically, But call through sequentially be is know know guide that any appreciate in you This half. EBITDA see it just see basically would And is much being don’t how conservatism the don’t to bonus. XX%, way revenue, And paid that what of in about in year? rest we just QX? helpful the onetime simply, we if talk obviously, digits you going think, bridge can there But the knowing single in assumes, XX% step-up something the from low both. and a

Ned Coletta

third and accrued in was the bonus quarter. So the the one-time second half half quarter in

managing starts, better. intelligence the come And name quarter. in our And happening cancellations So our think for at how and are activity, we to and having weekly of that at these month basis July as more indicators what’s a it. gotten of when key much is stats online, lot that really business third still the transitioning looking construction has have COVID economic looking lot we will like – a a from in as remaining, do or of on transitioned we stats it suspensions you have our back daily to what’s come business forecast with online, back trends the monthly

We just the major are the typical seeing not in summer. step-up

some And like be could online. it businesses coming are like things that of resorts seasonal and

best will I the Some QX. trend new can like. it right think, to we aren’t flattish People now, And from the starting projects we and QX a see fear. of is just, tell, more

some point, to your maybe conservatism, to it’s However, there’s hard tell. but

on side. the other of this The just point cost is

cost the in what move our we understanding every future. QX, in dug into benefited, can have where we we on way how So benefited which and

and business. out, things lower QX laid costs reopened And trends some that to think to Ed and we for we start as hospitals will the as refer of medical in like had even just like, are things it normal traffic like

we So perfect have a answer... don’t

Ed Johnson

standpoint, the main in level And Restaurants, not certainly to a open. up. we is are then going just anticipate we the normally saw from not that where from it the opening to beaches, – is. June, what to but tourism is going We see don’t fully coast summer be activity anywhere activity of comparable near

just Tyler. don’t are summer do, – we We we seeing that business anticipate not normally

Tyler Brown

That’s helpful. there appreciate out Okay. unknowns I very it. a know of is there. I lot

very feels it M&A like like So switching the – gears, it is pipeline John, sounds strong.

I used think robust. you the word

assets. of actually in waste-to-energy one think competitors acquired the quarter, your some I hauling

So, there’s perspective, I a guess, there? from an like allocate opportunity feel that has there? competition anything still – do changed obviously M&A Or you capital good to

John Casella

is little pipeline the to more It from continues there. There activity a – tremendous is be There a standpoint. a is significant. competitive very opportunity

You long, about market folks. been again, right that, the Tyler, time. But in a long we of for with some have the waste-to-energy are

We have for been X now years. working it on

to the independents pressure lot the prices standpoint, built they recyclables too, happened disposal going commodity have from that standpoint in period lot going interesting a also a of just awful has of that saw thing, were from We value and paying significant into COVID pricing I we of a of a amount pressure for situation is think for from they getting time. processing. were terms where are And a pipeline of over labor on

and top understanding of would thought would in people on prior be not COVID, that business have they who add to we interested more seeing even is and So are COVID really now. what you of I that, value then – the their

COVID see are an disruption think to from we of So dimension, because I added acquisition this. has more another and going standpoint

Tyler Brown

Yes.

to Okay, am Thank go and it pass perfect. on. I going ahead you.

John Casella

Thank you.

Operator

of from Eastman KeyBanc line next Your question the comes Sean Capital. from

Hamza Jaffer

is… This

John Casella

Sean. Hi,

Hamza Jaffer

Hello. me? hear you Can Hello.

John Casella

hear you. can We Yes.

Hamza Jaffer

operationally the expected What taking onset you in is This the sustained half? and in Jaffer, wanted you to speaking run is on what the some and cost just the office. across synergies second do of traction you my to And this Eastman. leverage work dive this rate to question. kind deeper the since team. back initiative? the in on pandemic? of I operations for Hamza thank Nice have Hi, Sean have be Compliments gotten gentlemen. Where XQ plans to for quarter

Ned Coletta

Yes.

are there’s to of improvement ago, great right One about we being that and digitize procurement the years are business ERP in efficiency on very we a and is manual a long-range of financial side. these area you as work investments to continue in drive lot our know, office. and ongoing. drive of done and risk. today, a lot the a further number So opportunity There’s back now incremental And programs without focused we have programs successfully our we X.X upgraded

the really So that to onboard with job we over the things we doing a coming been viability that pilot done pilots will that. low large program. in having about new the efficiency drive limited be Ed’s is before more risk excited through understand and key testing computing But think fixed routing on any team the side of months I system leading on are risk, a a have has to road the dynamic price technology through area. nice programs

we runway But next look in quarter. great we there more at the the skewed and a of next to as opportunity at you bit little specific efficiency look programs, to years, you a COVID So is business. continue of the pre-COVID of number kind the quarters, look drive several incremental the lot over cost if have benefits. that in

Jason Mead

turnover. program ago, with X a in years We also value terms of amount in Kelley. we career reduced terms a significant started new development got of of

has that really keep of helping were people. well With to turnover able program we drivers, the where of our been done have in We very, with arrival terms numbers, very Robinson, mechanics. really Kelley to attract able

things very our terms of been in the achieve turnover to cost standpoint have significant a able of very, of ops. lowering is that Some from we

the out that as to So continue future see into well. going we’ll

positive. very So

Hamza Jaffer

That’s to the – going it, of of Got XQ. half yields helpful. the collection pace you. a And as you trend price anticipate Thank growth? for Any economy growth disposal into space moderate back through how we nicely held color see in

Jason Mead

able – I XX% understand to things really that sure your in I things had is, time, our the been not point one the of think but about home. question, I’m one we’ve from do of one working at we of also back-office folks

things that of And do we coming as able care. able to have the some very we customer that do COVID effectively. is to that positive one be out the would of areas been have of And been that

have really have they well we able been an to So of doing. monitor people, how understanding are

was cetera. should should would be to helpful. we go-forward that – of continue growing positive very office coming we’re basis where estate, real out growing a of really that something be a et grow, So – helpful one on And as that COVID area in terms be that space,

people Some that of the some other that COVID were of to having positive things things operating found, in, is we in our reduce helped a also waves, has out costs. there coming come on that

that can. the on basis sure we to a savings go-forward much try So keep got make to number we a Ed’s possibly of that we as of want as things

Hamza Jaffer

is lower to on it. side, the half X% X% for or side? pricing the the do Got sustained back on more a you it And see

Ned Coletta

done, in majority significant I anticipate the think for was half us, the fortunately pricing that the don’t year. pricing first of our second We of in quarter. the

and after us February. for the said, the I As most was done of the year of right for year the first early in pricing January

the don’t through it’s we not pandemic. – increasing really been and because pricing positive COVID So we’ve

Hamza Jaffer

it. Thank very Got over. much turn will team. helpful. I you it That’s

Ned Coletta

You are welcome.

Operator

next Your Hoffman Michael from from line comes Stifel. question the of

John Casella

Michael. Hey,

Michael Hoffman

question the for Thanks Nice time. job.

John Casella

Thanks.

improve. are. working you, got We’ve to hard Michael. going We’ve We’re improve got where keep to to for you

Michael Hoffman

list Got That’s I this it. I of got why got it. questions.

So here we go.

John Casella

all am Okay, yours. terrific, terrific. I

keeping to Jason, – myself, going are are we Ned, work are ahead. Ed, hard. our head down, we Go – We

Michael Hoffman

can we it second bit. little If to flex Alright. half, about about a the cadence talk just

So half you scribbling correctly, deal with prepared we QX? assume sequentially on help And second that. should picked then Ned, may telling so be have can should us I the rollover XQ we missed your I flat us the EBITDA versus what get if up right? in you’re comments, that away

Ned Coletta

now Yes, what right currently we yes. then… and in That’s our have model

Michael Hoffman

the about what cadence? And then Okay. deal

Ned Coletta

cadence, those and – year for million revenues $XX about of about next deals about first deal about Sorry and EBITDA there’s is in about this the X around have XXXX and million million and into $X revenues year $X million we completed $X of year-to-date, then of year in we year. expect next

Jason, I I’m quarter. this if at looking sure done So the not year, this math have by back-half of

Jason Mead

Yes.

perspective, an had June, through $XX.X So we’ve of from million revenues. year-to-date acquisition

Michael Hoffman

So that rolled last year. includes from stuff over

Jason Mead

last year from That rollovers well. includes as

Ned Coletta

to a disaggregate it have that to may do We on math too. little

Jason Mead

Sure.

Michael Hoffman

Okay. year-to-date. $XX million you bought Well,

You haven’t quite done it evenly.

did of first million million feels million So or $X end the like maybe the $XX million because $X in you’re that saying $X and the the if for it’s second or $X year, half half. million you in

Ned Coletta

XXXX, $XX figure Yes, show But of deals afterwards. revenue XXXX. it’s that that in I probably pretty of close. up – in million we’ve million done out can about will about $XX the

half last Now in finer how of $X maybe million year. get the on that. pen or it’s million exactly $X a splits, it the can We

Michael Hoffman

from because of NOLs out Okay. by through kind what it done through timing you the pandemic of a the then That were when you be And helpful. would has run ‘XX. running

we the are how NOL? about thinking Now

Ned Coletta

Yes.

of really part been accelerated as have reform. we depreciation effectively the So tax using XXXX the

So accelerated acquisition an almost deal. as asset been we every do know, depreciation. taking of we’ve you is And advantage

well. been the preserving our million NOLs think at of it roughly remaining. So NOLs $XXX year, was end I still remarkably we’ve of And last

into So possible course, if as goal, to future, the look we income margins. of our as is much drive and out produce pretax

period, those gives to So opportunity acquisitions XXXX we or to smart it do accelerated But shield us some depreciation than the an use XXXX, to to and if out your current point. bring later continue is changing, really overtime. of in Michael, earnings course,

Michael Hoffman

Okay.

is the Vermont. I work Hampshire related be states and it this capital Maine, for way should So to England guess ‘XX? do issue that’s a New in and spending in of about think capital New I percentage direction spending good early How as of to it guidance, Southbridge revenue but be all flow. of less? you to had know. And free some Ontario then We done keep cash three and closing

Ned Coletta

Yes.

out just we investments capital, spending, on spending well as there And going have our business. XX%, the at quarter, been XX.X% additional we’ve tried look details to running So this where actually capital the if are you additional then some business. replacement in break on

we’re consolidate investing of you acquisitions, we very to get integration in part facilities, forma. name the as the year in complete we It’s synergies, acquisitions after all those when – contemplated heavily to pro it. original So complete

expansion investing we’re we Landfill. there. And of very this at in So the are course, large Waste then, USA money investing

We’re putting the site. at in XX-year infrastructure

of revenues. those expenditures running been So have X%ish capital

with into generally that USA can future. our might keep completed of roll be revenues, capital, point, then continue one X% spending guess, X.X% acquisitions and to vantage We will that if Waste we roughly the same pace the acquisitions, of The from something will into XXXX. to acquisition more those I be that continues year, project integrating

Michael Hoffman

get Okay, alright. decided not rebuilt That And helps. or has then MIRA let to expanded. Connecticut

So what on standpoint that dislocation landfill a do from helping does to sustain pricing?

Ed Johnson

the and impacted I Obviously, And there. to know, going still opportunity, you be like is Michael, tons, think as McKean. that marketplace. in they real is potentially a upon what tons X under be have a I and million would got see obviously, there’s happens depending X there that Connecticut, million we that processing, just to in think

portion us. that rail be If so opportunity for to option cause permit in of X,XXX place rail. waste, capacity. a have a had McKean we to contract to we day ton even by a there, continues invest that I would receive to us put have the mean, serve We capital an an have got long-term infrastructure for the something would McKean in there, to that the be

a on So go-forward. it opportunity an represents

So to it’s, the to X Northeast see more demand of and our X, that going terms in in over supply the the the next continue we’re same view, years. to challenges in X of

Michael Hoffman

me one X%, last is, being about talked have you education Okay. revenues. for of And about then X%

terribly are reopening. education not The you higher about Chronicle optimistic website, If Higher look at of Education’s they

market. lot a got higher of education in have You your

don’t So Is to we is back secondary. some that maybe part of not conservatism? – odd way the get by school

Ned Coletta

number, actually like commercial of was Sure, was said that when that it business. Sorry. we collection our X%ish, To

our may revenues, of X%. total is So than be education actual less

X% the want business, to it’s collection So about might total online. you maybe of to coming back our X%. answer And John,

I think.

John Casella

that – to that of I of approach very online. the mean year a we large the that portion it it’s see come is, for the I don’t have Yes. are going not likely of think that I think had part we balance conservative

So Michael. I at It’s going much is to comment mean, online I that probably is come up in the really back to correct, time. point your as how think, air this in

Ed Johnson

education, in a remind restart to again. occurs they then just there’s it and service seasonal but on And normally May, hold everybody, happens early of that sort late June

won’t this seasonally, service get year. let the closed that’s it early alone hold is thing So we that, that of on normal recovery

Ned Coletta

Yes. Yes.

services more that much fall, when get the as customers, we had a the to And early have of of we through to to through of as XX. early fall. COVID. back about suspending service institutions then we start you reducing XX% So are you into details come those said and cut levels, as And COVID, And coded point those March I back due online. customer, we come customers as service online number in we’re then there’s April that the by things we’re it, and wouldn’t so earlier, to summer expect like educational online customer and to through your cut that

John Casella

over. almost like is Summer

August in already, Ned. So don’t of we summer the are right? We left, have much

Ned Coletta

in customers not long. have also, we business very is of Michael, it’s not your comes segment. I number know. something that the huge but it also. part Yes, a back book are it not to Northeast, how it’s a of online, England, much in But it’s our of great sure point, New But we of

Michael Hoffman

watch a going That leveling that improve. keep because should are hearing to trend normalizing Okay. in cash and slower are you going am activity, flow cash What I up and off flow lot. accordingly, are sales at ‘XX business recovery rightsizing to manage you the – we costs that helped keeping to is free than continue a in free are we you

Ned Coletta

Yes.

Jason Mead

absolutely. Yes,

Michael Hoffman

great. Okay,

Ned Coletta

Thank you.

Michael Hoffman

Thanks.

Operator

the to like I over call back now management. would to turn

John Casella

our and rest We of with stay quarter earnings Thanks, in today. Have safe. you, everyone, look Thanks, fall. terrific for attention day, a Thank your operator. forward you third the everybody. to your discussing

Operator

today’s conference. concludes This

disconnect. You may now

Casella Waste Systems (CWST) 8 Aug 202020 Q2 Earnings call transcript