Casella Waste Restructures Operations

Casella Waste Systems Inc. is restructuring its operations to eliminate $6.5 million of annual costs.

The Rutland, Vt.-based waste and recycling company said in a news release that the realignment includes enhancing parts of sales functions to improve customer service and retention, pricing growth and support of strategic growth initiatives; streamlining operations support to better align transportation, route management and maintenance functions at the local level; and reducing corporate overhead and staff.

The company expects to take a one-time charge of approximately $1.5 million in its second quarter. 

 This realignment builds upon the steps the company has taken during the past 12 months to adjust its costs while still maintaining its focus on its main strategic growth objectives, the company said.

"The steps we have taken this week to realign our management structure are expected to improve our cost structure by roughly 100 basis points, but more importantly, will make our field teams more agile and responsive to customer needs," said John Casella, chairman and CEO of Casella Waste. "Our local management teams are in the best position to make informed local market decisions and to effectively service our customers. We believe that we are now better positioned to serve our customers and grow our business in the current economic environment."

For the most recent quarter the company continued to experience declines in special waste volumes at its western region landfills and weakness in recycling commodity pricing, resulting in weaker-than-expected performance.

While the company expects the cost reductions to substantially offset these revenue losses, officials don’t expect these revenue streams to return the remainder of its fiscal year. Because of that, Casella Waste has revised guidance for fiscal year 2013, which began May 1, with the following estimated ranges: revenues between $475 million and $485 million, and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) between $101 million and $105 million.