By the numbers
2023 full year revenue: $1.26B
Up 16.5% year over year
Q4 net loss: $1.8M
Compared with a net income of $8.4M for the same period the previous year. Net income was impacted by $5.2 million of expenses related to acquisitions, plus $3.9M in landfill repair expenses.
- Financial picture: During a Friday earnings call, CEO John Casella said it was an “exceptional year for the company,” in part because of the focus on efforts to improve safety and turnover rates as well as “meaningful growth” from acquisitions. “We close out the year on solid footing in Q4,” he said, pointing out “double digit revenue” as well as earnings before interest, taxes, depreciation, and amortization and adjusted free cash flow growth.
- Acquisitions: Casella completed seven acquisitions in 2023, representing about $315 million of annualized revenue. The company’s April acquisition of several GFL Environmental assets in Pennsylvania, Delaware and Maryland grew its operating footprint into the Mid-Atlantic in 2023, helping the company expand its acquisition pipeline to over $800 million, said President Ned Coletta. “We are positioned well to have another strong acquisition year in 2024,” he said.
- Q4 volumes: Solid waste volumes were down 1.4% year over year, while MSW and special waste volumes were flat. Landfill tons were down 3.7%, which CFO Brad Helgeson said reflects market softness in C&D volumes. Helgeson took on the role in November.
- Q4 pricing: Overall solid waste pricing was up 7.5% year over year, driven by 7.9% collection price growth and 6.9% disposal price growth, executives said. Solid waste revenues were up 40.4% year over year, and average landfill price per ton was up 9.8% year over year.
- Willimantic MRF: Following the successful equipment upgrades at Casella’s Boston MRF last year, John Casella said the company has similar plans to “fully upgrade” processing equipment at its facility in Willimantic, Connecticut, sometime in the second half of 2024. “We're reviewing other facilities where we can improve operating efficiencies and materials recovery,” he said.
- Workforce: In the last year, Casella has added more than 1,000 new employees due to acquisitions and organic growth. During that time, “We were able to bring our turnover down and improve our safety record — a real tribute to the entire team,” Casella said. The company’s turnover rate is down 20% year over year, and safety metrics such as total recordable incident rate have also improved, he said. Over 200 students have graduated from Casella’s CDL school, which is also helping to reduce turnover and increase safety, he said. The company’s new diesel technician program has seen 20 students graduate so far.
- Fleet improvements: Casella has automated about 56% of its residential fleet and deployed onboard computers on 70% of its fleet of about 1,400 trucks. “We expect to make additional progress in 2024,” Coletta said.
- Ontario County landfill repairs: Casella spent $3.9 million in Q4 for cleanup and repairs at its Ontario County landfill in New York when a layer of soil slid down the veneer of a capped section of the landfill. No one was hurt, the landfill itself was not damaged, and the company is investigating the cause of the issue, Hegelson said.
- RNG updates: Casella expects its first RNG project to be online in the first half of 2024, Coletta said. Archaea/BP will own and operate the facility while Casella “generates a royalty stream to the sale of gas and RINs with zero capital investment,” Coletta said. This facility will generate roughly 700,000 mm BTUs per year, he said.
- 2024 guidance: Casella estimates full-year revenue of between $1.48 billion and $1.51 billion. Net income is expected to be between $35 million and $45 million compared with $25.4 million in fiscal year 2023. Casella also expects revenue growth of between 17% and 19%, including about 14% of revenue growth — about $175 million — from the rollover impact of acquisitions completed during fiscal year 2023.
