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Dec 31, 2020
Casella Q4 2020 Earnings Report
Casella's financial results exceeded expectations due to strong operating execution, real-time cost controls and disciplined cash flow management.
Key Takeaways
Casella Waste Systems, Inc. reported a revenue increase of 3.4% for Q4 2020, driven by positive pricing and acquisitions, despite a decrease in solid waste volumes due to the COVID-19 pandemic. Net income saw a significant rise due to a non-recurring tax benefit. The company provided fiscal year 2021 guidance, anticipating continued growth.
Revenues for the quarter were $200.2 million, up 3.4% from the same period in 2019.
Net income for the quarter was $62.9 million, including a $55.0 million non-recurring benefit to income taxes.
Overall solid waste pricing increased by 3.9%, with collection pricing up 3.8% and landfill pricing up 5.6%.
Solid waste volumes were down (4.6)% year-over-year due to COVID-19 impacts.
Casella
Casella
Casella Revenue by Segment
Revenue by Segment
Collection Revenue
CapyFin.comDisposal Revenue
CapyFin.com Forward Guidance
The Company provided guidance for fiscal year 2021 by estimating revenues between $815 million and $830 million and net income between $33 million and $37 million.
Positive Outlook
- Revenue growth of between 5.2% and 7.2% in fiscal year 2021.
- 1.5% revenue growth from the roll-over impact of acquisitions completed during fiscal year 2020 and those already completed in early fiscal year 2021.
- Solid Waste business, revenue growth of between 6.5% and 9.5%, with price growth from 3.5% to 4.5%, volume growth from 1.0% to 2.5%, and 2.0% growth from acquisitions completed during fiscal year 2020 and those already completed in early fiscal year 2021.
- Resource Solutions business, revenue growth of approximately 1.5%, mainly driven by higher recycling commodity prices and neutral to slightly higher volumes, partially offset by lower processing fees.
- Adjusted Free Cash Flow between $75 million and $79 million
Challenges Ahead
- Volume headwinds and negative cost impacts of the COVID-19 pandemic.
- Guidance ranges do not contemplate a severe relapse of the COVID-19 pandemic or new stay-at-home orders, which may negatively impact commercial and general economic activity.
- Capital expenditures of approximately $113 million, which includes approximately $15 million of non-recurring capital associated with acquisition integration, and $13 million of Waste USA landfill phase VI construction capital expenditures.
- Net cash provided by operating activities will be negatively impacted in fiscal year 2021 as we plan to spend $10 million on landfill closure, site improvement and remediation expenditures associated with the Southbridge landfill closure.
- Income statement tax provision of approximately 30.5% in fiscal year 2021.
Revenue & Expenses
Visualization of income flow from segment revenue to net income