CWST - Earnings call 4 2023 | Casella Waste Systems, Inc.

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Operator

Good day, and thank you for standing by. Welcome to the Casella Waste Systems' Fourth Quarter 2023 Earnings Call. [Operator Instructions]

Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Charlie Wohlhuter, Director of Investor Relations. ahead. go Please

Charlie Wohlhuter

Waste to XXXX. Actual note the constitute first, provisions take your activities Private of business and expectations, the and those questions. results XXXX you, purposes our recent XX-K, including Securities joining Thank are that morning, these thank Litigation Financial of and Casella, Brad make our All safe result factors, important our Vice Helgeson, differ on indicated we and Victor. report of President Risk results, of and Officer the most for on of section Operating Form is about Chief of remarks Casella the Officer President Executive the and happy us and Jason Finance with please we company's annual and file us may various future of Ned call as statements by on Chief for you prospects from plans harbor yesterday quarter Coletta, released Treasurer; environment, were Chairman these on forward-looking Factors President; fourth and Waste Mead, right. which our Officer; Chief statements those Good in Sean which we forward-looking a Systems; company's of Senior be the various SEC. the discussed will Act Operations. Today, today. materially afternoon. Steves, But John With full may review our year under our an Senior Vice a the discuss Reform Solid After update results will

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

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

will to that, with to And I begin Casella now it turn our discussion. John over

John Casella

good conference against executing have ahead. we lie our and and everyone, that an and quarter our I'm illustrates company that success about strategies. continue key to the morning, welcome fourth was opportunities the excited XXXX in terms exceptional to Charlie, for Thanks, call. year This the of

First, year, we more the our our provide pass I'll will then who Brad it results and will specific performance strategies. around highlight to and Ned, on for and comments

and safety our service Our operating our full improve return-driven performance we while more upgrade MRF business, operations focus successful -- made on for productivity. our Boston benefits exceptional and equipment the delivering following from deploying notable capital delevering summer. service experiencing and is turnover helping investments XXXX growth. the driving We're across exceptional people in also reflects this A past us

at plans in I'm we XXXX. the our later to Connecticut fully have similar also excited facility announce to equipment recycling upgrade Willimantic, that processing

modernize and to further We invest infrastructure. our continue in sustainability

the right strikes returns Our balance benefits providing disciplined environment. approach and between economic the to

a results Kyle in entered. of Mid-Atlantic completed the and by in job terrific to X an press integration to Casella out of yesterday, release speed of and our A the the up the to other encouraged have I'm new region exciting team terms the our achievement I size and completing noted early in Mid-Atlantic done acquisitions given Mid-Atlantic XXXX, notable we've in shout we As was real bringing culture. the markets and and who the year. that his acquisitions team very

We flow -- XX adjusted new adjusted facilitate year, includes members we basis for of key with adjusted EBITDA XX%. us which implementing team our the evaluating of was is an impressive of runway growth And our up level see basis XXXX, growth QX We across programs. integration our footing post was consecutive The pricing XX%, growth closed expansion. over strategy approach expanded the operating business, in strength was developing business entire process, in the topped initiatives for solid help on financial and points, the allowed EBITDA acquisition In We and and with growth growth were to XXX really free out points margin really transition XX% business. year base engagement operating up base our adjusted sales to combined our our growth double-digit opportunities. margins of second ahead like in XX%. our over metrics. Revenues of the the our cash and indication EBITDA our strategy,

we the a to few key are business. our the strategies an and would provide to in XXXX, position execution in our comments performance ample we sheet, like of As of operations. few excellent balance some to related I of support of growth a our look have a strong and further liquidity on

programs a our in we volumes were year-over-year know, EBITDA. made this part across assets despite down to of operating our you possible, able disposal our strategy drive adjusted is XXXX, being key have returns and really higher As improving

the mix the our drive the in assets. our headwinds from This returns volume, helping focus to remain streams across the getting is inbound of and to disposal tons our per margins X.X% lower average price, ton landfill price driving right right and at offset the me. expanding improving helping a our testament to and landfill the costs lower to team committed year -- disposal up We excuse higher on

enabling our the have frontline I'm safer equally adding the optimization, in outcomes, graduates down. be ops important XXX engaged of starting automated are have are in the the and done trucks, this seeing terrific our in and ongoing business. Yes, especially returns students direct efficiencies proud safety among turnover rates lower our really base our business, onboard We're from what team Sean in team school the cost of great us job we're supporting particularly CDL that a our to strengthen of investment valuable. as of and CDL program. more program. and in since driving to but field and Over side our graduated higher route team, technology driving higher, collection like computers the of investments operating doing On is software, line resulting employee

focused from only XX into And a a safety. students we're of stability frankly, and received so and results diesel greater initiatives While their new couple our the show months technician far, have quite these people it. program, certificates

TRIR year-over-year down such XXXX, XX% safety as Our company-wide is key turnover while in rate metrics, improved. nearly

As to and so that key down turnover metrics the XXXX, a is proud our had throughout execution the Probably immense record, against we of we our our often these most that performance entire significant growth the does to thing tribute able improves improve company. as real team. bring safety I'm the a were in

Resource Solutions. finally, And

has is where continually sustainability before, of and back can mentioned an facilities delivered As our and results to we the other efficiencies enhance. company area half strive of operating are the materials is strong woven framework XXXX, the MRF, reviewing to recovery. upgraded I Similar over into we we which Boston improve

next be large of half will as in year. upgrade, to Our said, begin Willimantic MRF I this our at second the

offerings. is and and a the to that new continue Liza, driver entries ahead. for to that professional to Paul business more the significant win, our off job this business. our really see in looking at potential looking about those terrific A We us a those additional customers for this done that us to our opportunities. very and business excited Hats in grow looking revenues services really optimism the of to the us ahead. of won throughout to customers differentiating themselves growing XXXX to potential those of service front Mid-Atlantic, Turning what has team present opportunity present services key of they exciting entire market industrial provide Again, lots a opportunities for of

I particularly catastrophic where our Pennsylvania, am our mechanics, drivers, proud And our division service so entire our was New long of XXXX, can provided for flooding. in have I those time. a managers, talk states, midst wrapping the York, to Upstate what say exiting teams Vermont, our team, up, about in a Hampshire, New of I

picked have depended didn't operating service. an they care yet took their us center communities Some that of customers divisions the for and up of on that those

year. a to the training XXXX. all And Ned when have the it SAM and and extremely growth job exciting capital you team. the turnover significant and an unbelievable significant bring from So hats equally about to our is safety very core the importantly, to probably of entire and management say again, service in from people Shelley finance very, HR enhancing our organization most of been at ability legal. manage It's record. the year, a Kelly perspective, with through XXXX. structure has for understanding off enough grow compliance It to business. in the to team to an improve big X,XXX what across but come onboarded and look takes And just Jason, Casella, in a the a down I and fabulous permitting HR, just can't team continue as able values real absolutely in performance entire

over that, on the to with Brad more numbers. through I'll go turn specifics And it to

Bradford Helgeson

I've been my team. remains to I'm And X now. to some and Okay. shoes over good of side. the months by big a part morning, left Thanks, he company really obviously, Ned little for but John, fill, everyone. thrilled with the be

quarter. million of the year-over-year, fourth or growth change Revenues XX.X% million Moving $XX.X $XX.X quarter activity the $XX.X and on the up of X.X%. $XXX.X million driven to by acquisition million, with or in organic were

were tons contributing volumes with volumes Solid year-over-year, down were up X.X% X.X% up disposal in and and roll-off were revenues the revenue collection X.X% was $XX customer our growth softness ton reflecting residential MSW driven the served headwind flat. Resource fee. of the line the X.X%, moderation quality of of of year-over-year recycled churn trough acquisitions Solutions price second growth the With to our with in up X.X% basis. line year-over-year segment customers. of lower The revenue price down in Revenues XX.X% and revenues the increase X%. Volume over a year-over-year landfill returns the QX X.X%, average prices commodity risk the softness muted study. multiyear and up C&D landfill higher of on SRA the across Solutions year, volumes share of The Though price the the in an market or were its price with to X.X% was XX% commodity were historically adjust in per Stepping up efforts prices, recycling coaster the in up a were year-over-year of to was improve works by volumes of our in waste turned and years. commodity declines first course volatility that really revenue with and But X.X%. by in a over XX.X% but commodity driven up primarily XXXX. result and in price as have revenue XX.X% down X% the contract customers special on business a up XXXX a commodity of while good line preserve temporary positive essentially business and of prices pricing company's X within half, prices Accounts through have structures back, acquisition Revenues years direction with Resource X.X%. been and in a our of with sharing cycle, past low the prices for in the case margins up activity business. roller the peak the model this by by investment tipping XXXX. Overall, year-over-year. comparable on our fees over X recovery of past were and followed half sequential prices now via National regardless and waste

our growth. quarter, was QX. range million change the million up EBITDA At came adjusted $XX.X or million at of $XXX acquisitions in from in year, with Adjusted $X.X the million EBITDA middle organic at of million the and year-over-year, $XX.X from has increased for or $XX.X the guidance XX.X% XX%

retrofit operating EBITDA efficiencies adjusted in quarter, acquisitions, growth. and the the $XX.X Resource was waste Boston year-over-year, $X.X $X.X and strong with of up $XX.X million quarter, year-over-year million this prices. commodity in Solid up EBITDA adjusted driven pricing was by million benefits the higher driving the million Solutions

XX.X% fourth Again, X.X%, X.X%, fully over quarter, Inflation points has providing in of quarter quarter fuel. of the the our for sequentially pricing year-over-year. in XXX were elevated margins cost offset with but the growth a which quarter, basis remains and approximately spread for the Adjusted point which EBITDA record inflation at price programs inflation, Casella is moderating, excluding basis a up ran in historical XXX flat been terms. course consolidated

items MRF addition performance, collection the net recovery retrofit operating from performance, of cost from XXX our net points and bridging year-over-year basis again, to include expense, margin In improved lower by fuel basis driven price, points and reflecting recycling operating programs, fees. improved further the Boston processing XXX efficiencies from labor fuel

slightly Cost on company line and acquired the leachate a opportunity, and have of we basis basis down and our business. This tailwind quarter synergy point by to million of from execute margin a up the a more offset the increase outpace than mentioned. was XXX costs but represents in existing continues from on were XX revenue in a of a as and $XX.X course, come from plans. operate million inflation These of year-over-year, basis volumes as point integration was lower at $XX.X headwind the as points as headwind efficiently, percentage the higher acquisitions pre-synergies I've acquisitions. X businesses landfill margin revenue the operations as lower

$X.X and down was a operations year-over-year of quarter on increase acquisitions. tremendous percentage of but the same-store as a XXX grow. from a a cost activity. basis including administrative of the So to million revenue, year-over-year, Mid-Atlantic year-over-year, the in manage were is region down points costs up as million points million XXX investing The $XX.X which basis with we company here is but of we of percentage $X.X in basis, performance. General were revenue the was leverage expect over growth, million adding our as costs recent amortization gain our to the acquisition and G&A resulting time over further line support to $XX.X new Depreciation up operations, increase from

to expect XX.X% for quarter for unique of The million the with revenues perspective, we but at XX.X% of to the take and put Ontario The soil compared landfill. landfill quarter, after County never normal veneer operations of event in a fourth business. moment cap last our a down slid acquisitions layer an acquisition. To a where the interrupted. the each the D&A in section hurt Nobody was the A were capping charge $X.X as charge of item currently base covers quarter, for Engineering up. explained analysis is of related heightened Ned few acquired associated As root D&A to period the in causes write-off responsibility explain. included costs nonrecurring event. determine work current like cleaned I'd were and for to underway and the a the P&L years first this costs was to

it's the to quarter EPS in with GAAP acquisitions bottom the was rate loss on the company's $X quarter rates of prior the and quarter approximately on GAAP weighing growth $X.XX The these acquisitions the P&L year. in Our items pushed acquisitions Adjusted a impacted costs weighing was expenses for related acquisition-related Adjusted income of nondeductible discrete tax $X.X in expenses earnings, our year million the effective line accelerated long $X.XX $X.X the the $X.X D&A $X.XX the integrate down incurred net earnings. tailwinds quarter, capping accelerated headwinds become but earnings million above was million for years. pursue, and net certain was shareholder loss future XX%. ] of with rate acquisition million strategy in associated and year, the execute $X.XX significant million building [ compared to EPS and the in XX.X% term, of year. by value and will impacting a for was full and the $X.X statutory is landfill and charge. with to in term, near and for D&A

higher to million by year-over-year provided improved costs. year. net in assets was and ] headwinds changes and cost cash was we standpoint, up the by acquisitions, outflows working [ flat landfill Adjusted full at partially increased the that offset $XXX.X In of the performance, from by activities range and the free middle Net year-over-year operating This flow guidance days, year XXXX, few million for driven of was but finance for at $XXX.X capping higher was XX% full debt QX. higher the DSO a line, liabilities. cash our in from a XX including faced capital operating

for quarter little discuss is capital which history, as which into at to XXXX expenditures planned delays pushed the up deliveries our a in ended shortly. lighter coming the but spending QX, heaviest expectations guidance, I'll Relative some we equipment company's our in capital in spend reflected in

acquisition-related bit Going direction, activities the cash other came a costs in for higher.

had our of of over million As purposes rates of available interest had $XXX of approximately December interest we XX% average ratio $X.XX cash X.XXx, on bank was for debt, our $XXX of covenants net we Consolidated XX, million. was rate leverage debt. billion and our cash of and fixed X% liquidity

So the great is balance sheet shape. in

liquidity pipeline. on us Our in enable robust be continuing will to to execute profile leverage M&A our opportunistic and

the in cash As revenue year-over-year, we and flow. for midpoint, free in ranges in those growth underlying our guidance XX% and are XX% the ranges press relevant and EBITDA assumptions stated reflect our XX% announced laid growth XXXX adjusted yesterday, out release. release growth At in in

on but ranges reflect a C&D slightly Our outlook economic environment, assume cautious guidance a stable volumes.

guidance On of at rollover million approximately midpoint. the organic growth line, acquisition with or overall X.X% the approximately XX% $XXX our top includes

reflect flexibility if in of We pricing us revenue, not X% approximately respond again progresses. at activity. approximately changing for does across While collection XX% as business, conditions, we X.X%. we further we're well X%, XXXX, Organically, expect again inflation, of so to solid waste is in necessary, the acquisitive pricing positioned ahead to year of the running any our to our expect still guidance be retained to which acquisition

Solid weakness and temporary roll-off to waste volumes in X%, volumes businesses in landfill down potential to flat that are C&D with in the be reflected expected estimate.

to business Bridging to Willimantic is the rollover, acquisition of earlier, $XX John discussed XXXX million the Boston growth. adjusted million as million net improved is MRF, $XX is at base guidance, our impact MRF, downtime approximately retrofit performance to of organic $X million $XX and EBITDA

Bridging guidance from EBITDA Our to in are on of XX basis adjusted XXXX. basis reflects acquisitions by expected points. XXXX, weigh to improvement margin margin XX XX points margins approximately

MRF, of approximately Boston XX net basis our points volumes. to and The basis points XX by guidance, adds is offset Willimantic and XX our to add in downtime with leverage pricing expected programs somewhat softer to operating organic XX growth

cash -- consistently free expect XX% to grow to cash of our We with flow rate XX%. long-term adjusted free

investment includes We history $X In in company's time expenditures anticipate well exciting for year continue initial XXXX. the of to the Willimantic our as $XX is this approximately another in million to spend of start-up real with the acquisitions approximately investing recent into the closing, with business rail momentum fruit, $XXX and an we're $XX million approximately which million of Landfill other and complete capital connection the this at are operating programs million, McKean MRF nonrecurring retrofit. and significantly project. growth initiatives in bearing positioned

on Ned our strategic further I'll add over some initiatives. Now color turn to it to

Ned Coletta

against XXXX was efficiency key revenue projects year. by strategic robust we demonstrated against an continued Casella for acquisition execute plan. continued our the in foundational driven And extremely execution execution morning, activity, as investment initiatives, our organic growth pillars. This pricing financial growth good our and was Brad, to year our development this is and and well operating programs, for clearly long-term everyone. results in exciting Thanks, continue

and acquisitions in earlier, outlined As completed XXXX approximately including and into Mid-Atlantic just acquisitions into of our John newly Completing of million very acquired $XXX through acquired early the by our and to systems the XXXX annualized the has expansion team footprint revenues, back integrate X we and the region. late was a our starting hard worked point, businesses operations, office. into XXXX

remaining forma coming against well and the systems tracking acquisition back-office complete We are in expect each for the work and integration pro to months.

and critical team and helpful Mid-Atlantic team. successful and Larkin team against been to executing efforts. tirelessly a their our providing The super you doing Kyle their new while entire GFL thank great transition on working are the operating job assisting systems, us integration services our their migration with plan of has

team Our drive with by advance well has Bridges synergies Stehman to the Western acquired ensure region. Michael customer to top-notch led and extremely [indiscernible] through team region Twin partnered that quickly and efforts service integration operating

footprint strong in acquisition and million, With pipeline in our the built we XXXX, acquisition XXXX. are the Mid-Atlantic into another to to expansion we our of operating positioned year over well have have $XXX

in 'XX. On recycling equipment in the upgrade facility to side, we the completed our infrastructure, continue invest development return-driven Boston including early sustainability on full QX

pro As in we're with by improvement XX% revenues a productivity throughput. of costs on performance our driven ahead John operating processing mentioned, strong material the our tracking additional increased forma higher recovery, and at lowered

through Bob their you the big leadership Cappadona team upgrade very excellent a thank and McKnight entire managing A to process. Austin and complex for

tons on containerized offload, Our online progress municipal online to late rail to build-out capacity a sludges. we're McKean landfill. we will solid phase, made in waste, the be great Pennsylvania up this X,XXX offload bringing expect of of day team first XXXX. And also and infrastructure facility In soils mid in the the

few this operation the ramp years. next expect over to We slowly

in is about in As capacity management term less about waste near-term want disposal we this constrained viable flexibility and the volumes long-term Northeast. outlets risk long and as investment ensure more to

of will and Finally, a will capital facility the XXX,XXX investment. This stream MMBtu we with landfill generate or gas RNG BP X and to of first our the facility, year. RIN Casella generates be first roughly operate our in half from the The expect own XXXX. Juniper at Ridge per royalty sale project while online Archaea

been that growth. an we we right in maintaining as in the system positive an quite has investing rapid by people on roles. to and ensuring with our are and culture continue value right we organization, have the This our undertaking laser-focused As and people developing grow our

impact efforts with we've over progress positive XX% have over in and the service at operating acquisitions, and Further, welcomed to members. effectively fleet employees field. opportunity residential Casella, efforts Over X,XXX did excellent on top-notch to last teams year, fleet team executing against growth, tools. a loader these cost new new new key team year to the technology a automation Mid-Atlantic enhancing through make XX% Casella are automated the [ XXXX, the onboarding making advance our people's and our our only initiatives. operations end our operating implementing key Prado organic reducing Through on an while a computing of of automated amazing great fleet or trucks. These plan fleet, the job today. new we've the job last operating fleet collection our our continue digital our to with done improve onboard customers' either our our additional safety residential automated of side Sean truck and of The ] with including and residential introduced program automate introduced experience Steves we

have step in onboard experience. our XXXX. digitize computers our our to and OBCs opportunities, improve payment to our X,XXX customer new further operations Kevin efforts enhancing customer sheets an our important profile for important used deployed expect route creating Keith CIO; on make things and Drohan, new We the we in launch CIO, customer a partnered Landau progress our collection in data teams portal road digitizing effectively The in XXXX, automating are additional and and XX% revenue additional reporting. marking like of to and fleet, our our safety truck approximately

to key the continue to strategy customers manage invest this area the ensure to key and coming of data years their plan We tools services have to in access in intelligence. right

we believe value I'll to turn into today. execute the the to over further it opportunity to to key we And continue for shareholder Looking drive XXXX, growth. areas that, with operator questions in profitable a strong have and

Operator

And conduct question Mazzoni Instructions] Our of will at from time, Wells a first Fargo. come this we'll from John session. [Operator the line question-and-answer

John Peter Mazzoni

kind around line tipping only any in but fees within of might terms kind think a types quickly think kind as trends dynamics of other other seeing specifically of have you cadence you're step disposal impact Can of the not the the you and kind think item, some on 'XX? kind kind on should pricing just the the downs are of we lot touch Northeast line I volumes? of here, we of of what model? how that about of the types we early indicators seeing And of about for items but of or also that understood

Ned Coletta

Yes.

life, happening the overall, continue what's the in years. sites their early months going last the 'XX end permanently same we But the trends over to and closed, close is had over coming are and We've sites as into So sites of the construction debris And additional line. expect to Northeast. and this of happened what's they a bit end the the certain want to several one the we price large the fill kind they just lines. additional demo going close to year next of and and plus of them up, might hold with sprinting to sites they're even steady in for that's or look and see approach

of As But both marketplace. plan The in entered received XXXX to volumes. again. high single at construction side are price stable soils positive, the side, demo pressure kind contaminated things increases well we've a little And seen been on a on MSW, the in pricing well and with digits the justified. we've robust it's such, landfills pricing the of are

get costs run back complex, to continues environment continues to side, and need more to Regulatory the those to more the on we closing. Our landfill get and capping, inflation marketplace. development high

So get up. site, C&D, it just coming of rush about the that than bit their it with that little 'XX. it's in then in Northeast you'll buttoned that side for is the a someone additional tightening less other softness the probably to see about the some market in economy into close And

John Casella

X X at next for pricing worth looking It in capacity disposal capacity, well disposal clearly years we're a of year-over-year that how to for really bodes the on terms basis. is more

make also, in facility all, people our up a pretty to XXXX in the we're over to anticipate and set years operational. addition of we the that many sure up from this landfill We And to at position X end the at will next is quarter. McKean the also, capital excited up the in of have invested ramping as and be facility that, a So is know, and perspective. terms X but don't that significant we pricing operational

John Peter Mazzoni

spread color. kind of main the just about kind Good a fleet, kind inflation other uptick the maybe on just you potential it. less think outline think of But or quantify on rate. buckets of some types on helpful. we in seeing outside drivers any understand It just also of would terms you're anything cost of inflationary onetime inflationary that prices. But of be trend. of exposure items have tailwind kind quick the as to of side get guys helpful I of you the what kind kind one And commodity that could that and you was kind from price base of in that of kind Got those 'XX, and of very we of between if And kind could side.

Bradford Helgeson

It were In seen company that Brad. the relating inflation really one. Those up of the landfills. looking cost stubborn last It's Inflation particularly tires. Yes. is We've consistent this and just pretty reported fourth notable north rate. down, we kind Ned second of a running outside X.X%. remains our board, year. under inflation of board. repairs, across trend stubbornly quarter, with X% Labor probably alluded to ago, the but seeing at The gradually. inflation high. across X% is the That's overall the We're to a are is really in

kind view inflation of targeting number, a more this solid growth, material the of business. in year. taking that for number. we disposal Based of X% earlier, as the price on really not assume at less We are we're that to or across that's point the further and where moderating on collection X% we said So waste we're balance

the that plus mentioned, about much to that year commodities, certainly either if is look asked point commodity. prices looking And commodity such the we But And bearing basis actually you they're the us or far. maintain can. And So our be commodity out of model you XXX up minus as that that impact spread, is so going way. year-over-year. like to beginning don't prices

Operator

will And from Raymond of come Brown the line our next Tyler question from James.

Tyler Brown

more call. the great your again hear conference failure. I just But on Brad, bit color off, get hey, little a veneer wanted voice a to to on First

of But a question. had missed slide kind John, was happened later precipitation? have Two, determined too have before? it in a root may cause, quarter. like it one, you was three, this So the multipart it, sludge And the then or much but what I

expect So expense should in QX? a of spillover the we

John Casella

basis, the time, had the veneer in again, perspectives There's -- through really I'll stopped Let a that had Tyler, this And me it. detail the It veneer I additional and it at The we third be through about on in sure done failure. that yet. think... was what the we'll but we was well take to transportation of future. report a the with caused that different with was bit go-forward Brad, we could as need parties. going no try what in in little make failure Maybe, practical roads go all by as a point by very to couple said, We're we make one talk facility. steps Brad contractor third-party a from a that obviously the we standpoint gas. engineers hurt, to preclude happening nonissue. haven't was determination And make to sure it to from It understand that a a

Ned Coletta

synthetic of point, slope the a additional top down that slid cap the basically. it's One soil on

So but to rebuilt. the to needs no and there down it inside then itself, was be damage landfill, nothing exposed pulled landfill

Tyler Brown

Incurring cost?

John Casella

so will But to this in don't Tyler. point any time, this be believe any we -- additional That's additional to more any at And do. don't time. We point evaluation, costs there we're going additional in work at we're need correct. that doing believe or

Tyler Brown

Okay.

Okay, great. -- on kind I cash flow. another few a question got of is And then multipart

$X mentioned So slated that I think you only you have million for McKean.

a those sorry does have was legal Potsdam remediation to 'XX. know $X at you're questions. I that three, question. basically settlement the payment point? two, million down What is So that and winding a about that? multipart I'm but spend this that's And that, Southbridge then was in when expecting sunset? there start I Number

Ned Coletta

solid take of nearly McKean, worth at this infrastructure So in in spur almost We've sludges. soils first mile wrapped and and up switches, a waste containerized are phase. off gantry to we to regards containerized put track, crane offload

we're be on So X,XXX tons to to X,XXX turn a to able the out up building infrastructure to facility the day.

some As kind closing switch I for We'll potentially the to to slowly It's kind a bit time. work, over our said rapidly. look ramp at 'XX, sites earlier, material in this don't ramp $X in the Northeast other we look risk The not the of million expect track stepping we to more XXXX. in is This of this long-term of is up. little management as of remaining numbers going work. risk be

showing up, the that onto trucks Some with systems articulated working of rail equipment landfill. the phase take containers heavy up the of the

DOT-mandated to that, site. time, landfill, had in action, So invest really class At out that Labor second have lawsuit there the action back we plan clear the in we took not I through happen. it's to -- or money, the in Fair the we employees the at investments. relation ever clear at near-term game wasn't lawyer construction waste quarter Standards contested mainly it's go strategy $X for point to demo were was policies, we in, was to that would The to quarter wrapped additional ever the here in class We first second take the up. that think, a breaks. our million in work what And If that charge of supposed expect who organization this the door XXXX. quarter lunch our of standards happened their certain action

breaks. take But drivers such employees, of maybe as And to money attorney. documentation, class. Our with they court lunch been so much employees have who surely as a were go in for of our decided that through retrospect, will great do part systems, could the our our our to we weren't need of law, settle

future. introspection documentation changed are right taking processes the the a and So to breaks truly placed those procedures and we and of into lot we've done ensure have that our people

So of... it's a culmination

John Casella

Yes. industry. also consistent. it's also the attorneys The action Tyler, And have it's targeted -- really class

Ned Coletta

is you're one-off not right. Casella John, situation, This a Yes.

some monitoring site fully into continuous the So There's was cleaned but that of complete. the Potsdam up. future, kind Superfund remediation is

as well. We're The other the at of joint investments really end that. parties made

been the shape. on state Massachusetts we've enter closure working site for painfully, phase. the approval in Southbridge, great post-closure the ready with We've We're of final now. The several is years to vast phase. the and haven't that gotten approval, done Tyler. to just site of it regulatory working at we're that that, get final hard And to get to the majority we investment

Tyler Brown

Yes. know Great. I Okay. multipart was a question. that

New I Okay. want to York. to turn

you while And you curious on So know don't won't make possibly haul open those thoughts that think haul that, awards have the you in clear you that Do there. I in McKean? you likely know and all? you if to impacts of recent tons don't that I'm would any sense but station ever New to market, zone maybe at York, just I rail some access to help market in it transfer that

Ned Coletta

Yes.

we you New And Zone So out, York [indiscernible] correctly New completed the awards. do directly as participate Waste in point York City City. not

in that that not It's didn't We focus landfills we market Upstate, some continue New of and great market. out in historically have customers us. some for real customers it. York a enter We transfer City have our to that's to a waste had

with there those York of opportunity lot waste some XX City. However, sites to McKean, rail be transfer some renewals closest one to we a to we will years continue awards of the discretion with have with the XX-year stations that And of capacity. may for work at won New of were and the awards, city the to

for opportunity great a is it us. So

John Casella

add, their at awarded and franchises they're facilities, think served. that, rail Interstate action when of look the -- have XX to would own Tyler, only I I XX you were interstate. They

waste very their So portion facilities. that large to go a of that will it's very likely

right the to that I think again, now alternative to got we'll terms franchise transfer of continue with city. But have there as -- an keep the Interstate. that good able in portion is disposal an certainly, we in mind the of will future. capacity we're are will that overall in we into be opportunity stations with be And waste a working you've that

Tyler Brown

the talked same question. pricing one, kind last to continues seeing disposal of about But My feel you interesting. thing, measurable rail it you ramp any on and it on Are it's the the in Very broadly? capacity first like impact Northeast. little a Yes. bit does

Ned Coletta

on emerging right? Long some one alternatives, the in rail activity backdrop with end also there's because comes and frankly, one And little or with crunch, maybe off then a It around you the bit of at new rail capacity and the and of or pricing a that offline this that's site Well, things construction seen, Island. comes complexity other in a So the debris through we've of site. even and Yes. our just ramp-up in participants site regulations the really some and of of the demo new accounting cost inflationary in kind hasn't volumes. flows, I But life Northeast, of see reaching impacted of other mentioned Northeast. the ebbs of view capacity market some

said, change and doesn't for going So these to the on with run we but construction right it as returns. how with volumes, bit you outlook demo our long-term that little a see the now, sites we're

these returns We have at to sites. on laser-focused be XX-year

Operator

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

Michael Hoffman

is versus a the be story permanent you could I'd good container, me low-quality frame trends? large if to So business, bad about of outlook might I small in margins. talk than like volume a do versus dig to and think better we your MSW, shedding. volume volume volume volume container And bad aggregate. those into about is How Because purposeful -- volume negative from perspective good that's

Ned Coletta

right lease get our look on right that work. bit residential we sure customers, price, highlighted in C&D challenge a roll-off at where then the little we if It And too making hauling bit have X work, little has areas, truck lower-margin at point, a mean volume of laser-focused and there's really And didn't great especially our and we've the quarter. in debris of last labor fourth availability. side the it, it a the mentioned a we the some landfills Michael. I that, of residential when demo, Brad just the of on was side, been been much years, on the on was couple That's side, look we you decline, and Yes. at the construction discussed. into

we focused the we really have. on we're making get So sure each on return right stock

get purposeful not trying So willing that. is customer point, up than segments to a some shedding. and we're it accept lower margin to certain We're of to

there, regard, more quarter. On in slowing of always the the think Northeast, see pretty the sequential XXXX We little side, country. a solid a demo may slowing fourth the little Starting nothing that, into probably further area, with that bit bit out other there a some decline. and I parts construction of in be in

Michael Hoffman

Okay.

-- commentary, of volume and big scrambled collection of to side the part to X in competitors to burner temporary the fourth they're market, from a the out lot the rail Tyler's basically and in their away quarter, other it a they the tying that's it. pricing the seasonally statement figured because period. And quality the they the another our the it, there is of So on impact spot spot unit fill of volume was of get moved recovered regardless prices, market don't volume of is the burners state spot surveys they if the markets this out What underlying weak disposal in seat, today? about airplane that the backfill an My volumes. say impression, market can't as even

Ned Coletta

Yes.

-- a advantage of we'll of renew spot be take landfill the those [indiscernible] some We our that been the the our lot So take contracts price of a if we our tension always lower right And term. for waste side. has we'll where definitely lot landfills at Northeast, point later, pretty with haulers have a own some with prices. the capacity advantage the long-term per that on site at flows make camp point long-term can across and of to strategic se in take become spot footprint save in But great long We maybe advantage other we a waste. and bring tons take able do of -- we've price price. relationships we our third-party this also and work of decision. a of we various to don't We by have

John Casella

ongoing. that agreements and to of course Michael, our capacity into also, the bit spot little that as And we than spot winter. to happy ability to fill that Historically, be in the could enter those know, of we're more would But of in that have the that wintertime. capacity incinerators a stabilize the for significant fill help you terms more through

Ned Coletta

Yes, number scripts, Brad important had actually it's in a there.

So price Brad, landfills I -- our was think close average up at per to the XX%... ton

Bradford Helgeson

think… I

Ned Coletta

quarter. XX% in the

shows -- just in going and that mean, funds... I the So that's third-party's across average funds and our

John Casella

of and the we're of Function managing waste going how the in, mix disposal right?

Ned Coletta

We're not lowering for spot price...

Michael Hoffman

all you than that you you and The it you then and prices, end probably should no prior same Okay. comment, at risk That's we of And frighten is can a price that and more price. of was inflation, your the years. accordingly. to There know. unit good because underlying at manage think to it's question inflation is none time. higher can agree a low going cost I to can And can the XX important

price able to higher, to no So whether going we stay through, with risk unit structurally be price. there's you're and to it

Bradford Helgeson

That's correct. No risk.

Michael Hoffman

landfill... the clear on be just to then And

John Casella

inflation. of capability offset particularly because we the of that of amount business to with Particularly with -- our business our book have, have we small contracts the book municipal of

Michael Hoffman

slope is failure You failure, have high the open percent to not price? And is a liner that like... then market landfill access a

John Casella

Michael, it a was liner not failure.

a that's a you cap then you a dirt the failure the It when just and failure where synthetic synthetic of And was the was. failure It cap, wasn't facility, the synthetic on top put existing soils, a waste that, simply cap. the goes over of slid... the veneer cap liner. cap of the and cap, of So the then over top a

Michael Hoffman

blah. failure. Advanced a disrupting That's This Disposal to blah, a ago. clear out had everybody. Yes, It's that be company failure, a but there's just for there not several peer not revenue, true slope slope is years blah, one had

John Casella

regulatory there was disrupt Didn't the operations no facility. from the action And standpoint. of a

Michael Hoffman

had they much the had homes of movement. what residential. an have more were the pretty are and a of I opportunity most But most City, there's take volume volume, lastly, bit like about that. talk home franchise X think commercial want of There's different then where before part, the move which for seems that because think Okay. York waste, little you to to to And types is New I maybe where opportunity advantage all we in residential What there's waste. commercial is they then a as about sensitive that it it and franchised the there's to

Ned Coletta

Yes.

the had partners a this those steady our of years, of as for York customers are we've As of coming Michael, sites in out commercial wave flows and I won contracts mean, those in and city pretty to number have well. said several New we've before,

minus from city about or Casella So our There anything be -- may new our maybe here see in getting for but a rail a we the don't that vantage that's major interaction. capacity little bit that's be could in plus point. looked of at an opportunity, that's it

Operator

the [Operator next Instructions] of comes Adam Goldman Sachs. question from Our line from Bubes

Adam Bubes

any you the mentioned And acquired businesses XXXX you pre-synergies much update existing Bridges on in lower I can just in? a at us How coming Can just GFL come that more? that have on the than think assets, elaborate Twin you in progress our margin margins stand-alone lower major integrating little and surprises? business. slightly

Bradford Helgeson

] it's Brad. Michael, [ Yes,

margin, think quarter. slightly that weighed margins talking coming margin. the I of, a to in really lower in lower I the mentioned about X points it fourth it at So basis on I'm tune

this capture and to tailwind think continue pretty quickly. a the we really, margin view I become opportunity integrate an very will the businesses the we as synergies. to start businesses, integrate as So quickly This

John Casella

both integration entire has And to significant I to really earlier, and our the well. real as and and GFL that those Bridges, the relationship do GFL rethink an is with the Ned from able mean, Twin with think said no and the Ned we as routing Adam. of gone transition Jason, do standpoint team, working aspect that we or I folks Scott surprises, things quickly need can. probably has transactions the most them, were -- We to built of

No upside for either. surprises at from the of terms rerouting tailwind be surprise, to the the going value anything, for also from both and also are in If companies about it. about talking a were excited the is participation Scott that really we're on opportunity So us of surprises. terms really looking to create Margins in us a not shortly. Brad's that the

a So a but were they little not bit that's either. surprise lower,

Adam Bubes

the can just can assets how understand are just to talk you much help realize expecting And you targeted us synergies then of in of XXXX? from ramp the So you about margin here? these

Ned Coletta

Yes.

well And So synergies over Mid-Atlantic. year we Bridges about landfill, the had had Capital synergies get in million probably over the first the $X thereabouts in recognized X years. we'll and years. an first as of tracking period. of we're in being that we're of with to probably that $X about progress some the that the consolidations, X-year great X/X admitted X feeling from in over like we and District, We've little year. more excellent there of recognized and And really early And Twin XX% about a about upside million had some

Bradford Helgeson

And last points time. opportunity year, in synergies deals stepping the into back, baked up for about of that in Yes. that's talked reflecting the basis were And expansion kind forward. that's add margin It's XXX guidance. about all if the done the I we you over as go total our

that of year. some get we'll this So

Adam Bubes

about change, And thinking M&A? Bridge's And and next higher GFL interest folks over months? the during level integration do about of XX how funding how can asset the you're are sustain Twin you period, how you M&A rates the thinking the

John Casella

that of part take me you, let Adam. for Well,

in happy before from And coming an that he our be put some that think of more we board Mid-Atlantic I on with with integration the couldn't up. for has ran those keep assets standpoint, Casella. Kyle Larkin team competitors mind,

going an out is extremely Same well. well. for So thing well he's as Bridges, extremely built team entire the The Twin with integration that's Mid-Atlantic. going

do from But the don't of -- and we continued growth. very I record, to integrate think We've standpoint. from going have been businesses able time, significant integration M&A or M&A safety Bridge turnover. standpoint. from significant to We standpoint, work to at significant the -- that we're a have practical an demonstrate for to of on the those GFL XXXX an very bring still any integration So is impact amount opportunities lower have capabilities down lower Twin same

the lot of needed of weaknesses. year, the we challenges hired we terms last that some where growth So those approached of think that a really the looking most that did We've work office weaknesses. people had. our we've to I back We've of in at over the of

pretty sit we looking we're and about where to forward So excited XXXX.

Ned Coletta

do on it's want concern you the And I for side, Brad, interest in mean us... not hop a to rate

Bradford Helgeson

Yes, we're over XX% fixed...

John Casella

the that probably only think thing It not probably at in businesses. impact the does how more I looks looking it how modeling -- pressure terms Ned we're their has some sell in may to may and change it creating of It on impact more financials independents an of we're terms will at. have acquisitions. is how it of do

Ned Coletta

And cash. got revolver. of through $XXX cash. right liquidity got now, Yes. million We've of on we've both $XXX close our liquidity got to We've million

work position of a put we're doing And John's So on we're integration. shareholders really to with good I money work a to positive returns. in lot we've point, mean, got to for

towards that's causes year super it and this the to great So overlap, look in pipeline. really great excited We're about near-term you near-term our pipeline high everything fit. quality, quality, fit strategic is

John Casella

making a disciplined don't terms stayed in company. Yes. about really the M&A pass you we quite we've And very quality, to of think it's that, honestly, I sure into the on. high much acquisition high-quality integrate hear And that that Adam,

Operator

showing for it back any queue, Casella remarks. in to closing one I'll turn John [Operator on the Instructions] And

John Casella

great great have weekend. to discussing you holiday Thanks, I April. everyone, hope holiday you. a for earnings day joining first XXXX look our and Thanks, Have great I weekend. Thank all quarter us in a everybody. this forward a morning.

Operator

for your today's conference. you conclude This does program. Thank the participation in

disconnect. a You Everyone, great have may now day.

Casella Waste Systems (CWST) 16 Feb 242023 Q4 Earnings call transcript