Casella Reports Successful Q2 2024 Fueled by Pricing, Acquisitions

Casella Waste Systems, Inc. (Casella) announced its second quarter financial results today, citing solid performance with its organic growth and through its acquisitions.

For Q2, Casella reports its revenue as $377.2 million, which is up $87.5 million from 2023’s second quarter. Casella reports that revenue growth was mainly driven by the rollover contribution from acquisitions closed in 2023, strong collection and disposal pricing, and higher recycling commodity prices.

"We continued to execute on our core operating strategies in the second quarter and have driven solid year-to-date performance," said John W. Casella, Chairman and CEO of Casella Waste Systems, Inc. "The growth in our business, both organically and through acquisitions, positions us well for the second half of the year."

As of August 1, Casella has acquired five businesses with over $100 million in aggregate annualized revenues. This includes the newly announced acquisitions of LMR Disposal LLC and Whitetail Disposal, Inc., which closed on July 1 and August 1, 2024, respectively.

"Since the end of the second quarter, we acquired two high-quality companies in the Mid-Atlantic region that expand and densify our operations in this market and offer exciting growth opportunities," Casella said.

"We would like to welcome our new team members and customers, and we look forward to continuing to deliver a high level of service. As we build scale in this market, we see further value creation opportunity through cost efficiencies and our differentiated service offerings. Our M&A pipeline remains robust across our entire footprint with potential to close on more acquisitions this year."

Net Income was $7.0 million for Q2, an increase of $1.5 million from last year during the same period. Adjusted EBITDA was $91.6 million for the second quarter of 2024, up $19.4 million from last year.

Operating income finished the second quarter at $23.0 million, up 0.4 million from 2023’s Q2.

"Our overall operating performance has been consistent with our plan through the first half of the year, though some discrete factors negatively impacted Adjusted EBITDA on a year-over-year basis in the second quarter," Casella said.

"Volumes at the landfills were down year-over-year, which we anticipated, but we also incurred approximately $3 million of unanticipated expenses, representing 80 basis points of margin headwind in the quarter, notably higher leachate costs with the continued wet weather and employee separation costs. These issues offset the underlying success of our pricing programs, which remain ahead of inflation, and our operating programs, which are driving costs out of our collection line of business."

Following the successful first half of 2024, Casella has raised its guidance for the rest of the year. The company raised its revenue outlook to between $1.520 billion and $1.550 billion, which was previously in the range of $1.480 billion to $1.510 billion. Adjusted EBITDA increases to between $360 million and $370 million for the remaining fiscal year, raised from a range of $350 million to $360 million.

"Incorporating acquisitions completed to date, we are raising our revenue and Adjusted EBITDA guidance for fiscal year 2024,” Casella said.

“We are reaffirming guidance for Adjusted Free Cash Flow, with the expected contribution from acquisitions offset by the cost of financing and a conservative outlook on working capital. We are lowering our ranges for net income and net cash provided by operating activities primarily due to higher acquisition-related expenditures. These updated ranges assume a stable economic environment over the remainder of the year.”

Q2 2024 Highlights:

Revenue: $377.2 million

Adjusted EBITDA: $91.6 million

Net Income: $7.0 million