Casella(US:CWST)2021-04-30 22:19Financial Data and Key Metrics Changes - Consolidated revenues for Q1 2021 were $189.5 million, an increase of 3.6% year-over-year, with 2.1% of this change driven by acquisition activity [28] - Adjusted EBITDA was $38.8 million, up 15.9% year-over-year, with margins expanding by 215 basis points to 20.5% [34] - Adjusted free cash flow increased by $6.9 million year-over-year to $11 million [41] Business Line Data and Key Metrics Changes - Solid Waste revenues increased by 2% year-over-year, with pricing up 3.4% and volumes down 3.3% [28] - Collection revenues rose by 3.1% year-over-year, with pricing up 3.5% and volumes down 2.3% [29] - Resource Solutions revenues increased by 8.1% year-over-year, driven by higher recycling commodity prices [33] Market Data and Key Metrics Changes - Solid Waste volumes declined by 3.3% compared to Q1 2020, primarily due to lower economic activity in the Greater New York City area [12][32] - The company has seen a recovery in collection service levels, with over 70% of the commercial and industrial collection services that were reduced or suspended due to COVID now recovered [31] Company Strategy and Development Direction - The company is focused on capital allocation and growth strategy, with a robust acquisition pipeline of over $400 million in addressable opportunities [25] - The management is optimistic about the phased reopening of major cities across the Northeast, which is expected to drive volume recovery [27] Management's Comments on Operating Environment and Future Outlook - Management noted that while economic activity levels were lower compared to Q1 2020, there are positive trends in volume recovery as the economy reopens [12][13] - The company expects Solid Waste volumes to increase by approximately 8% year-over-year in Q2 and by about 1% in the subsequent quarters [44] Other Important Information - The company reaffirmed its revenue and net income guidance ranges while raising ranges for adjusted EBITDA, adjusted free cash flow, and net cash provided by operating activities [42] - The company is actively working on the Phase 6 landfill expansion at the Waste USA landfill, expected to be completed in 2021 [41] Q&A Session Summary Question: Importance of New York City volumes - Management indicated that approximately 80% of the decline in landfill volumes was related to customers in New York City or surrounding areas, which significantly impacted overall performance [60] Question: Impact of volume weakness on landfill pricing - Management acknowledged that lower volumes affected pricing strategies, but they expect pricing to improve as volumes recover [61][66] Question: Sustainable pricing levels - Management suggested that sustainable pricing is expected to be in the range of 3.5% to 4.5% moving forward, with a focus on maintaining margins [81] Question: M&A activity and pipeline - Management is currently working on $80 million worth of acquisition opportunities and anticipates activity to increase in the second half of the year [73] Question: Incremental margins on full recovery - Management estimated that incremental margins on recovered landfill revenue could exceed 50%, while collection revenue recovery might yield around 30% to 35% incremental margins [109]