Casella Waste Systems Heads into New Year with Strong Q4 2022

Casella Waste Systems (NASDAQ: CWST) finished 2022 with double-digit revenue growth in Q4 despite economic headwinds.

 Revenues reached $272.1 million, up 12.5 percent from Q4 2021. 

"We had another solid quarter and an exceptional year despite high inflation and a volatile period for recycling commodities," said John W. Casella, Chairman and CEO of Casella Waste Systems, Inc. "Continued execution against our long-term strategic plan resulted in surpassing both $1 billion in revenues and $100 million in Adjusted Free Cash Flow in fiscal year 2022 for the first time in the Company’s history. Our team deserves tremendous recognition for these achievements and the resilience shown this past year positions us well for continued execution and for our next stage of growth."

Overall solid waste pricing for Q4 increased 6.2 percent year over year (YOY) with increases in collection and disposal pricing. Net income totaled $8.4 million, down 7.9 percent from the previous year's period. 

Financial expectations were exceeded in 2022 as Casella reported full-year revenue grew by 22 percent, adjusted EBITDA by 20.5 percent, and adjusted free cash flow by 16.7 percent.

 "These positive results reflect continued returns from our operating initiatives, the flexibility of our pricing and risk-mitigating fee programs, and the agility of our operating teams in a complex operating environment as we continue to grow the business. In the year, we advanced collection pricing of 7.0% and solid waste pricing of 6.4%. Given the persistent inflationary environment, we have initiated another year of comprehensive pricing in 2023 in an effort to offset this headwind and drive further value."

Casella spoke about the company's 2024 plan, saying: "Last year, we set a target to optimistically grow revenues by $30 million dollars or more per year in acquisitions or development activity. In 2022, we outperformed the goal and acquired 14 businesses with roughly $51 million of annualized revenue."

Two potential acquisitions are expected to close in Q2 2023 with total annual revenues of $30 million. He also noted two renewable natural gas facilities that are scheduled to come online in 2023.

Q4 Highlights:

Revenue: $272.1 million
Net Income: $8.4 million
Adjusted EBITDA: $56.2 million
Adjusted Free Cash Flow: $111.2 million

Full-Year Highlights:

Revenue: $1.085 billion
Net income: $53.1 million
Adjusted EBITDA: $245 million

2023 Outlook:

Revenue: $1.150 billion - $1.180 billion ($1.085 billion in fiscal year 2022)
Net income:  $56 million - $62 million ($53.1 million in fiscal year 2022)
Adjusted EBITDA: $266 million - $272 million ($245.2 million in fiscal year 2022)
Net cash provided by operating activities: $227 million and $233 million ($217.3 million in fiscal year 2022)
Adjusted free cash flow: $119 million and $125 million (as compared to $111.2 million in fiscal year 2022)