Casella Waste Systems reports 1Q21 results

• First quarter financial results exceeded expectations, with strong operating execution, cost efficiencies and disciplined cash flow management.
• The Company raised its Adjusted EBITDA, net cash provided by operating activities, and Adjusted Free Cash Flow guidance ranges, and reaffirmed its revenue and net income guidance ranges for the fiscal year ending December 31, 2021 ("fiscal year 2021").

Vermont Business Magazine Casella Waste Systems, Inc (NASDAQ: CWST), a regional solid waste, recycling and resource management services company based in Rutland, on Thursday reported its financial results for the three month period ended March 31, 2021.

Highlights for the Three Months Ended March 31, 2021:

• Revenues were $189.5 million for the quarter, up $6.6 million, or up 3.6%, from the same period in 2020.
• Overall solid waste pricing for the quarter was up 3.4%, driven by collection pricing, up 3.5%, and landfill pricing, up 3.5%, from the same period in 2020.
• Net income was $4.3 million for the quarter, up $3.3 million, or up 349.5%, from the same period in 2020.
• Adjusted EBITDA, a non-GAAP measure, was $38.8 million for the quarter, up $5.3 million, or up 15.9%, from the same period in 2020.
• Net income as a percentage of revenues was 2.3% for the quarter, up 175 basis points from the same period in 2020. Adjusted EBITDA as a percentage of revenues, a non-GAAP measure, was 20.5% for the quarter, up 215 basis points from the same period in 2020.
• Net cash provided by operating activities was $32.1 million for the quarter, up $17.4 million, or up 117.3%, from the same period in 2020.
• Adjusted Free Cash Flow, a non-GAAP measure, was $11.0 million for the quarter, up $6.9 million, or up 172.8%, from the same period in 2020.

“Our team continued to execute very well through the first quarter as we increased Adjusted EBITDA by 15.9%, Adjusted EBITDA margins by 215 basis points, and Adjusted Free Cash Flow by 172.8% year-over-year in the quarter despite continued solid waste volume headwinds due to the COVID-19 pandemic,” said John W. Casella, Chairman and CEO of Casella Waste Systems, Inc. “These positive results are a testament to the hard work, adaptability and dedication of our team, the resiliency of our business model, our asset positioning in the disposal capacity constrained northeast market that allowed us to advance positive solid waste pricing, and strong execution against our operating and cost efficiency programs.”

“Solid waste volume declines continued to moderate sequentially from the fourth quarter of 2020 through the first quarter of fiscal year 2021,” Casella said. “With volumes down (3.3)% year-over-year in the quarter, we had a tough volume comparison in the first quarter as we experienced only very limited negative impacts from the COVID-19 pandemic late in the first quarter last year. We expect solid waste volumes to improve year-over-year through the remainder of fiscal year 2021.”

“As more Americans are vaccinated and the states in which we operate further ease COVID-19 specific restrictions, we continue to see additional commercial customers reopen or increase services, construction activity increase, and overall economic activity rebound across our mainly secondary and rural markets in the northeast,” Casella said.

“We continued to make great progress against our 2021 strategic plan during the quarter,” Casella said. “And, we are well positioned to drive additional acquisition growth through the remainder of the year as our acquisition pipeline remains robust and activity is accelerating.”

For the quarter, revenues were $189.5 million, up $6.6 million, or up 3.6%, from the same period in 2020, with revenue growth mainly driven by: positive collection and disposal pricing; the roll-over impact from acquisitions; higher recycling commodity prices; and higher resource solutions non-processing revenues; partially offset by lower solid waste volumes primarily due to the negative impacts of the COVID-19 pandemic and lower fuel surcharge and other fees.

Net income was $4.3 million for the quarter, or $0.08 per diluted common share, up $3.3 million, or up 349.5%, as compared to net income of $1.0 million, or $0.02 per diluted common share, for the same period in 2020. The quarter included $0.4 million of expense from acquisition activities and $0.2 million of legal and other expenses associated with the closure of our landfill in Southbridge, Massachusetts ("Southbridge Landfill"). The same quarter last year included $1.0 million of expense from acquisition activities and $0.6 million of legal and other costs associated with the Southbridge Landfill closure.

Given the reversal of the tax valuation allowance in 2020, we expect an income statement tax provision of approximately 31% in fiscal year 2021. The income tax provision was $2.4 million in the quarter, up $2.3 million from the same period in 2020, and as expected we paid cash taxes of $0.2 million in the quarter.

Adjusted Net Income, a non-GAAP measure, was $4.8 million for the quarter, or $0.09 Adjusted Diluted Earnings Per Common Share, up $2.6 million, or up 122.1%, as compared to Adjusted Net Income of $2.1 million, or $0.04 Adjusted Diluted Earnings Per Common Share, for the same period in 2020.

Operating income was $12.0 million for the quarter, up $5.0 million, or up 71.3% from the same period in 2020. Adjusted EBITDA was $38.8 million for the quarter, up $5.3 million, or up 15.9%, from the same period in 2020.

Fiscal Year 2021 Outlook

“Given our solid execution year-to-date combined with increased visibility of economic trends, we are updating our fiscal year 2021 guidance ranges that were first announced in mid-February,” Casella said. “These guidance ranges assume a stable economic environment continuing through the remainder of the year with only a modest rebound in solid waste volumes as major cities in our markets are slowly reopening from the COVID-19 pandemic.”

The Company raised guidance for fiscal year 2021 by estimating results in the following ranges:

• Adjusted EBITDA between $185 million and $189 million (raised from $184 million and $188 million);
• Net cash provided by operating activities between $150 million and $154 million (raised from $149 million and $153 million); and
• Adjusted Free Cash Flow between $76 million and $80 million (raised from $75 million and $79 million).

And, the Company reaffirmed guidance for fiscal year 2021 by estimating results in the following ranges:

• Revenues between $815 million and $830 million; and
• Net income between $33 million and $37 million.

Adjusted EBITDA and Adjusted Free Cash Flow related to fiscal year 2021 are described in the Reconciliation of Fiscal Year 2021 Outlook Non-GAAP Measures section of this press release. Net income and Net cash provided by operating activities are provided as the most directly comparable GAAP measures to Adjusted EBITDA and Adjusted Free Cash Flow, respectively, however these forward-looking estimates for fiscal year 2021 do not contemplate any unanticipated or non-recurring impacts.

Conference call to discuss quarter

The Company will host a conference call to discuss these results on Friday, April 30, 2021 at 10:00 a.m. Eastern Time. Individuals interested in participating in the call should dial (877) 838-4153 or for international participants (720) 545-0037 at least 10 minutes before start time. The Conference ID is 760 9317 for the call and the replay.

The call will also be webcast; to listen, participants should visit the company’s website at http://ir.casella.com and follow the appropriate link to the webcast. A replay of the call will be available on the Company's website, or by calling (855) 859-2056 or (404) 537-3406 (Conference ID 760 9317).

About Casella Waste Systems, Inc.

Casella Waste Systems, Inc., headquartered in Rutland, Vermont, provides resource management expertise and services to residential, commercial, municipal and industrial customers, primarily in the areas of solid waste collection and disposal, transfer, recycling and organics services in the northeastern United States. For further information, investors contact Ned Coletta, Chief Financial Officer at (802) 772-2239; media contact Joseph Fusco, Vice President at (802) 772-2247; or visit the Company’s website at http://www.casella.com.

Source: RUTLAND, Vt., April 29, 2021 (GLOBE NEWSWIRE) -- Casella Waste Systems, Inc http://www.casella.com