Casella Waste Systems Inc (CWST) Q2 2024 Earnings Call Highlights: Record Revenue and Strategic ...

GuruFocus News
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In This Article:

  • Revenue: $377.2 million, up 30.2% year-over-year.

  • Adjusted EBITDA: $91.6 million, up 26.9% year-over-year.

  • Adjusted EBITDA Margin: 24.3%, down 60 basis points year-over-year.

  • Solid Waste Revenue Growth: 35.1% year-over-year.

  • Landfill Revenue: Down 5.2% year-over-year.

  • Resource Solutions Revenue: Up 15.4% year-over-year.

  • Adjusted Net Income: $12.5 million, down $6.3 million year-over-year.

  • Net Cash Provided by Operating Activities: $79.8 million for the first six months, down $3.4 million year-over-year.

  • Adjusted Free Cash Flow: $39.5 million for the first six months.

  • Debt: $1.05 billion as of June 30.

  • Available Liquidity: $481 million as of June 30.

  • Consolidated Net Leverage Ratio: 2.63x.

  • Acquisitions: Five acquisitions year-to-date, expected to contribute over $100 million of annualized revenues.

Release Date: August 02, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Casella Waste Systems Inc (NASDAQ:CWST) achieved all-time highs in both revenue and adjusted EBITDA for the quarter, reflecting strong business performance.

  • The company completed five acquisitions year-to-date, contributing over $100 million in annualized revenues, enhancing growth and market presence.

  • The recycling operations posted strong results, with average commodity revenue per ton up 50% year-over-year, driven by the Boston MRF.

  • Casella Waste Systems Inc (NASDAQ:CWST) has a robust acquisition pipeline, indicating potential for further growth and expansion.

  • The company is effectively managing inflationary pressures with flexible pricing strategies, maintaining a positive price/cost spread.

Negative Points

  • Landfill volumes were down year-over-year, with continued weakness in C&D and special waste volumes, impacting overall performance.

  • Higher operating costs, including leachate expenses due to wet weather, negatively affected margins in the quarter.

  • Adjusted net income decreased by $6.3 million compared to the prior year, impacted by higher amortization of intangibles from acquisitions.

  • Cash flow from operating activities was down year-over-year, affected by slower AR collections from recently acquired businesses.

  • The effective tax rate was higher than the statutory rate, driven by non-deductible expenses and discrete items, impacting net income.

Q & A Highlights

Q: Can you clarify if the $3 million in leachate costs were due to systemic issues or recent flooding? A: John Casella, CEO: The increased leachate costs were due to significant flooding in Vermont and parts of New Hampshire, Maine, and upstate New York, not systemic issues like PFAS.

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