By the numbers
Net income: $17.8M
Up 51% from the same period in 2021
Revenue for 12-month period through June: More than $1B
This is the first time Casella has surpassed this mark in its multidecade history.
- Economic outlook: Casella Waste Systems CEO John Casella touted rosy second-quarter results, calling it “a great quarter, perhaps the best quarter in the company's history” despite inflation, during a Friday earnings call. Casella attributed the strong quarter to revenue growth from acquisitions, positive collection and disposal pricing, operational efficiencies and higher solid waste volumes.
- Managing inflation: The company has continued the pricing programs it adopted last quarter to manage inflation and higher operating costs, President and Chief Financial Officer Ned Coletta said. Overall solid waste pricing was up 6.9% in the second quarter, while collection pricing was up 7.7%. Fuel cost recovery fees were up 5.3% and a new fuel surcharge was introduced at Casella’s transfer stations in June.
- Disposal volumes: After a “tough winter,” landfill pricing was up 5.5% year over year, while the average price per ton was up 6.4% and landfill tons were up 5.1%, Coletta said. The recent closure of a refuse-derived fuel facility in Connecticut that once had about 720,000 tons per year of annual disposal capacity, could represent more business opportunities in the near future as it tightens up “the already imbalanced supply and demand of the Northeast,” Casella said. He expects volumes to remain “a little fluid” for about a year.
- Facility updates: Meanwhile, the company has applied for federal grants to help fund infrastructure improvements and capacity expansion at its rail-served McKean Landfill in Pennsylvania, which is expected to be operational by 2024. Casella’s Hyland, New York, landfill expansion is expected to open in three to four years, Casella said.
- Recycling: Casella highlighted facility updates such as a $20 million investment in the modernization of its Boston MRF, mainly for the purchase of robotics equipment. Casella expects the new equipment to be operational in the first quarter of 2023. It recently also installed new robotics at its Ontario County, New York, recycling facility, and the company plans technology upgrades at several others.
- Acquisitions: Casella closed on 11 acquisitions year to date worth about $47 million in annualized revenue. Of those acquisitions, five have closed since the Q1 earnings call in April and three closed in July. Casella said the company could close additional deals this fiscal year. Over the last year, the number of employees has gone up about 25% due to acquisitions.
- Updated guidance: The company updated its guidance for the second time this year in multiple categories due to “stronger than planned” pricing programs, Coletta said. Revenue guidance is between $1.035 billion and $1.05 billion, up from a range of $1.005 billion to $1.020 billion.
