Casella Waste Systems Inc.
In late-2022, Casella Waste Systems Inc, located in Rutland Vermont, unveiled its financial report covering both a twelve-month and three-month period.
The report highlighted substantial progress across all fronts, with particular emphasis on its core business, solid waste management services, coupled with recycling and Casella’s overall resource preservation efforts.
Revenue figures saw a noticeable upswing during the last quarter, with an increase of $30.3 million bringing the total up to $272.1 million, showcasing a growth rate of 12.5 percent. These figures surpassed those recorded for the same period last year by a considerable margin.
Multiple factors have contributed to the surge in revenue. The foremost factor is the rising of collection and disposal pricing. Additionally, solid waste, and fuel cost recovery fees have also seen an upward trend.
The organization’s acquisition activities during fiscal year 2021 and 2022 have played a significant role in boosting growth, along with improved pricing strategies. Moreover, the company’s Resource Solutions operating segment has experienced an enhancement in recycling processing fees, and volume that has further augmented overall revenue generation.
Financial Results
The quarter earnings report revealed that total revenues amounted to $8.4 million, corresponding with a diluted common share value of 16 cents, slightly lower than last years figure of $9.1 million, or 18 cents per diluted common share during the same period.
Nonetheless, despite this slight setback, income rose by a substantial 5.5 percent from last years figures to reach $17.2 million in total for this quarter alone. Additionally, another positive outcome is seen through Adjusted Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) which registered at an impressive high, amounting to around $56.2 million during this term, thereby showing significant growth by 9 percent when compared directly with last years recorded results during the same time frame.
John W. Casella, chairman and CEO of Casella Waste Systems comments, “We had another solid quarter and an exceptional year despite high inflation and a volatile period for recycling commodities”. “Continued execution against our long-term strategic plan resulted in surpassing both $1 billion in revenues and $100 million in adjusted free cash flow in fiscal year 2022 for the first time in the company’s history. Our team deserves tremendous recognition for these achievements and the resilience [showed] this past year positions us well for continued execution and for our next stage of growth.”
Fiscal Year 2022
In fiscal year 2022, there was commendable growth in revenues for Casella which amounted to $1,085.1 million, depicting a surge of about 22 percent translating into approximately $195.9 million greater than in preceding fiscal year 2021. The firm’s net income witnessed significant rise also, adding approximately $53.1 million or $10.3 per diluted common share against fiscal year 2021, where only $41.1 million was achieved with each diluted common share worth 80 cents.
Similarly, its reported income for that same period stood at about $95.4 million; this representing a notable leap when compared with fiscal year 2021 which recorded only about 17.7 million as its reported income. Even more noteworthy, adjusted EBITDA rose remarkably and ended up at approximately $245.2 million, corroborating incredible growth when compared with last years numbers, amounting to $41.7 million.
“Growth through acquisitions is an integral part of our strategy. In fiscal year 2022, we acquired 14 businesses with annualized revenues of approximately $51 million, of which we expect to recognize roughly $15.5 million of revenues in fiscal year 2023 from the rollover impact of acquisitions completed throughout 2022. We have a robust pipeline including a number of deals in the late stages, and we expect another year of strong execution against our growth strategy in 2023,” Casella states.
2023 Projections
Looking forward through the upcoming fiscal year of 2023, Casella expects to generate revenues ranging between $1.15 to $1.18 billion dollars with a net income estimated at anywhere from $56 million up through $62 million dollars. To add further detail, the company anticipates adjusted EBITDA registering somewhere on the spectrum between $266 and $272 million dollars.
The following assumptions have been considered when making these projections:
- For fiscal year 2023, revenue is projected to increase by between 6. and 8.7 percent, with an additional 1.4 percent (or $15.5 million) stemming from acquisitions made during FY 2022.
- At this time, two potential acquisitions with a combined annualized revenue of $30 million have been identified and are under a letter of intent. It is anticipated that these transactions will be finalized by Q2’s end. For FY 2023, guidance does not factor in either of these acquisitions or any others that have yet to be completed.
- The solid waste industry saw a steady increase of revenue between 9.7 percent to 11.2 percent over the past year, due to a combination of price increases at 6-7 percent, volume growth of 0.5-1 percent, and 1.3 percent from acquisitions accomplished during fiscal 2022.
- The Resource Solutions sector is predicted to experience a revenue expansion of between 3.7 percent and 2.3 percent, mainly due to the 1.7 percent growth from acquisitions finished during fiscal year 2022, as well as favorable prices and volumes. This growth will be partially counterbalanced by reduced recycling product costs.
- In total, the Company’s investment in its operations amounted to around $141 million. This includes about $18 million for acquisition integration and another $10 million for the McKean landfill rail project’s initial phase.
- For the fiscal year 2023, Casella’s outflow of cash for operating activities is expected to be significantly impacted as a result of its plan to invest around $11 million in landfill capping, closure and post-closure costs. This expenditure will aid them in upholding regulatory obligations while also cutting down on emissions.
