Casella posts 1Q 2022 results and updates FY22 guidance

Rivai H Tukimen

First quarter financial results reflect strong pricing programs and the continued execution of key operating programs.

Vermont Business Magazine Casella Waste Systems, Inc (NASDAQ: CWST), a Rutland-based regional solid waste, recycling and resource management services company, today reported its financial results for the three month period ended March 31, 2022. The company also updated certain guidance ranges for the fiscal year ending December 31, 2022.

Highlights for the Three Months Ended March 31, 2022: 

  • Revenues were $234.0 million for the quarter, up $44.5 million, or up 23.5%, from the same period in 2021.
  • Overall solid waste pricing for the quarter was up 5.6%, driven by collection pricing, up 6.5%, and disposal pricing, up 4.0%, from the same period in 2021.
  • Net income was $4.2 million for the quarter, down $(0.1) million, or down (2.8)%, from the same period in 2021; with approximately $1.5 million of the decline associated with a true up of depreciation and amortization expense related to the July 2021 acquisition of Willimantic Waste Paper Co., Inc.
  • Adjusted Net Income, a non-GAAP measure, was $5.8 million for the quarter, up $1.0 million, or up 21.5%, from the same period in 2021.
  • Adjusted EBITDA, a non-GAAP measure, was $45.6 million for the quarter, up $6.7 million, or up 17.3%, from the same period in 2021.
  • Net cash provided by operating activities was $24.7 million for the quarter, down $(7.4) million, or down (23.1)%, from the same period in 2021.
  • Adjusted Free Cash Flow, a non-GAAP measure, was $16.3 million for the quarter, up $6.1 million, or up 59.4%, from the same period in 2021.

“I am pleased with the start to the year, in particular with our pricing programs that further improved during the quarter and is allowing us to manage well through this period of historically high inflation,” said John W. Casella, Chairman and CEO of Casella Waste Systems, Inc. “Our team continues to do a great job navigating this complex environment with responsive pricing programs, fuel cost recovery fees, and operational execution that has produced a solid start to the year during our seasonally slowest quarter.”

“Given the rapidly rising inflationary environment, we quickly adjusted our fiscal year 2022 pricing programs at the beginning of the year, which resulted in a 6.5% increase in collection pricing and a 5.6% increase in solid waste pricing overall in the quarter,” Casella said. “We are also mitigating rising fuel costs through our fuel cost recovery fees, which float monthly to recover increases in fuel costs, albeit these trailing fees have an inherent lag in rising markets.”

“Despite our margins being down year-over-year in the quarter, our core pricing programs did outpace inflation,” Casella said. “Several identifiable factors weighed on margins in the quarter including severe winter weather that hampered disposal volumes, construction delays at a key landfill, expected margin dilution from acquisitions, and margin headwinds from the fuel recovery fees. Our margins were up year-over-year in the month of March, and we expect our pricing programs and operating initiatives to allow us to expand margins for the full year.”

“We continue to perform well against our growth strategy and have closed on six acquisitions year-to-date adding approximately $30 million of annualized revenues, including the recent acquisition of the Northstar Pulp & Paper Co., Inc. (“Northstar”) business. Our acquisition pipeline continues to be robust with opportunity to close additional deals this fiscal year,” Casella said.

For the quarter, revenues were $234.0 million, up $44.5 million, or up 23.5%, from the same period in 2021, with revenue growth mainly driven by: the roll-over impact from acquisitions along with newly closed deals, positive collection and disposal pricing; slightly higher solid waste volumes; higher recycled commodity prices; and higher price and volumes within our Resource Solutions operating segment.

Net income was $4.2 million for the quarter, or $0.08 per diluted common share, down $(0.1) million, or down (2.8)%, as compared to net income of $4.3 million, or $0.08 per diluted common share, for the same period in 2021. Adjusted Net Income was $5.8 million for the quarter, or $0.11 Adjusted Diluted Earnings Per Common Share, a non-GAAP measure, up $1.0 million, or up 21.5%, as compared to Adjusted Net Income of $4.8 million, or $0.09 Adjusted Diluted Earnings Per Common Share, for the same period in 2021.

Operating income was $10.2 million for the quarter, down $(1.8) million, or down (15.3)%, from the same period in 2021. Operating income was negatively impacted in the period by approximately $1.5 million due to a true up of depreciation and amortization expense related to the July 2021 acquisition of Willimantic Waste Paper Co., Inc. Adjusted Operating Income, a non-GAAP measure, was $12.4 million for the quarter, down $(0.2) million, or down (1.8)% from the same period in 2021. Adjusted EBITDA was $45.6 million for the quarter, up $6.7 million, or up 17.3%, from the same period in 2021.

Please refer to “Non-GAAP Performance Measures” included in “Reconciliation of Certain Non-GAAP Measures” below for additional information and reconciliations of Adjusted Net Income, Adjusted Diluted Earnings Per Common Share, Adjusted Operating Income and Adjusted EBITDA to their most directly comparable GAAP measures.

Net cash provided by operating activities was $24.7 million for the quarter, as compared to $32.1 million for the same period in 2021, with the negative year-over-year change mainly due to timing differences in accounts receivable due to acquisition activity that is expected to resolve during fiscal year 2022. Adjusted Free Cash Flow was $16.3 million for the quarter, as compared to $10.2 million for the same period in 2021.

Please refer to “Non-GAAP Liquidity Measures” included in “Reconciliation of Certain Non-GAAP Measures” below for additional information and reconciliation of Adjusted Free Cash Flow to its most directly comparable GAAP measure.

Fiscal Year 2022 Outlook

“Given the expected positive contribution from the Northstar acquisition coupled with our strong operating execution, we are updating certain fiscal year 2022 guidance ranges that were first announced in mid-February,” Casella said. “These guidance ranges assume a stable economic environment continuing through the remainder of the year, including the current historically high inflationary environment. We expect our pricing and cost recovery fees to outpace inflation for the remainder of the year to drive margin expansion year-over-year.”

The Company raised certain guidance for fiscal year 2022 by estimating results in the following ranges:

  • Revenues between $1.005 billion and $1.020 billion (raised from a range of $980 million to $995 million);
  • Adjusted EBITDA between $232 million and $236 million (raised from a range of $228 million to $232 million); and
  • Net cash provided by operating activities between $204 million and $208 million (raised from a range of $202 million to $206 million).

And, the Company reaffirmed certain guidance for fiscal year 2022 by estimating results in the following ranges:

  • Net income between $48 million and $52 million; and
  • Adjusted Free Cash Flow between $104 million and $108 million.

Adjusted EBITDA and Adjusted Free Cash Flow related to fiscal year 2022 are described in the Reconciliation of Fiscal Year 2022 Outlook Non-GAAP Measures section of this press release. Net income and Net cash provided by operating activities are provided as the most directly comparable GAAP measures to Adjusted EBITDA and Adjusted Free Cash Flow, respectively, however these forward-looking estimates for fiscal year 2022 do not contemplate any unanticipated or non-recurring impacts.

Conference call to discuss quarter

The Company will host a conference call to discuss these results on Friday, April 29, 2022 at 10:00 a.m. Eastern Time. Individuals interested in participating in the call should dial (877) 838-4153 or for international participants (720) 545-0037 at least 10 minutes before start time. The Conference ID is 889 4483 for the call and the replay.

The call will also be webcast; to listen, participants should visit the company’s website at http://ir.casella.com and follow the appropriate link to the webcast. A replay of the call will be available on the Company’s website, or by calling (855) 859-2056 or (404) 537-3406 (Conference ID 889 4483).

About Casella Waste Systems, Inc.

Casella Waste Systems, Inc., headquartered in Rutland, Vermont, provides resource management expertise and services to residential, commercial, municipal, institutional and industrial customers, primarily in the areas of solid waste collection and disposal, transfer, recycling and organics services in the northeastern United States. For further information, visit the Company’s website at http://www.casella.com.

CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except for per share data)

  Three Months Ended
March 31,
    2022       2021  
Revenues $ 234,027     $ 189,532  
Operating expenses:      
Cost of operations   162,455       127,139  
General and administration   29,793       27,131  
Depreciation and amortization   29,428       22,682  
Expense from acquisition activities   2,043       414  
Southbridge Landfill closure charge   140       157  
    223,859       177,523  
Operating income   10,168       12,009  
Other expense (income):      
Interest expense, net   5,164       5,404  
Other income   (144 )     (138 )
Other expense, net   5,020       5,266  
Income before income taxes   5,148       6,743  
Provision for income taxes   958       2,432  
Net income $ 4,190     $ 4,311  
Basic weighted average common shares outstanding   51,490       51,179  
Basic earnings per common share $ 0.08     $ 0.08  
Diluted weighted average common shares outstanding   51,657       51,387  
Diluted earnings per common share $ 0.08     $ 0.08  
               

CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)

  March 31,
2022
  December 31,
2021
  (Unaudited)    
ASSETS      
CURRENT ASSETS:      
Cash and cash equivalents $ 12,594     $ 33,809  
Accounts receivable, net of allowance for credit losses   93,244       86,979  
Other current assets   28,147       25,691  
Total current assets   133,985       146,479  
Property, plant and equipment, net of accumulated depreciation and amortization   646,691       644,604  
Operating lease right-of-use assets   93,961       93,799  
Goodwill   258,414       232,860  
Intangible assets, net of accumulated amortization   100,864       93,723  
Other non-current assets   73,056       72,115  
Total assets $ 1,306,971     $ 1,283,580  
LIABILITIES AND STOCKHOLDERS’ EQUITY      
CURRENT LIABILITIES:      
Current maturities of debt $ 9,873     $ 9,901  
Current operating lease liabilities   7,125       7,307  
Accounts payable   65,244       63,086  
Other accrued liabilities   61,305       71,899  
Total current liabilities   143,547       152,193  
Debt, less current portion   560,594       542,503  
Operating lease liabilities, less current portion   58,262       56,375  
Other long-term liabilities   109,518       110,052  
Total stockholders’ equity   435,050       422,457  
Total liabilities and stockholders’ equity $ 1,306,971     $ 1,283,580  
               

CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

  Three Months Ended
March 31,
    2022       2021  
Cash Flows from Operating Activities:      
Net income $ 4,190     $ 4,311  
Adjustments to reconcile net income to net cash provided by operating activities:      
Depreciation and amortization   29,428       22,682  
Interest accretion on landfill and environmental remediation liabilities   1,966       1,957  
Amortization of debt issuance costs   457       572  
Stock-based compensation   2,241       2,941  
Operating lease right-of-use assets expense   3,162       3,015  
Gain on sale of property and equipment   (77 )     (24 )
Non-cash expense from acquisition activities   937       146  
Deferred income taxes   534       2,300  
Changes in assets and liabilities, net of effects of acquisitions and divestitures   (18,124 )     (5,753 )
Net cash provided by operating activities   24,714       32,147  
Cash Flows from Investing Activities:      
Acquisitions, net of cash acquired   (49,757 )     (4,568 )
Additions to property, plant and equipment   (12,910 )     (26,832 )
Proceeds from sale of property and equipment   145       123  
Net cash used in investing activities   (62,522 )     (31,277 )
Cash Flows from Financing Activities:      
Proceeds from debt borrowings   25,600        
Principal payments on debt   (9,014 )     (2,769 )
Payments of debt issuance costs   (12 )      
Proceeds from the exercise of share based awards   19       112  
Net cash provided by (used in) financing activities   16,593       (2,657 )
Net decrease in cash and cash equivalents   (21,215 )     (1,787 )
Cash and cash equivalents, beginning of period   33,809       154,342  
Cash and cash equivalents, end of period $ 12,594     $ 152,555  
Supplemental Disclosure of Cash Flow Information:      
Cash interest payments $ 4,840     $ 5,020  
Cash income tax payments, net $ 221     $ 238  
Non-current assets obtained through long-term financing obligations $ 1,032     $ 4,569  
Right-of-use assets obtained in exchange for operating lease obligations $ 2,710     $ 512  
       

CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES
UNAUDITED RECONCILIATION OF CERTAIN NON-GAAP MEASURES
(In thousands)

Non-GAAP Performance Measures

In addition to disclosing financial results prepared in accordance with generally accepted accounting principles in the United States (“GAAP”), the Company also presents non-GAAP performance measures such as Adjusted EBITDA, Adjusted EBITDA as a percentage of revenues, Adjusted Operating Income, Adjusted Operating Income as a percentage of revenues, Adjusted Net Income and Adjusted Diluted Earnings Per Common Share that provide an understanding of operational performance because it considers them important supplemental measures of the Company’s performance that are frequently used by securities analysts, investors and other interested parties in the evaluation of the Company’s results. The Company also believes that identifying the impact of certain items as adjustments provides more transparency and comparability across periods. Management uses these non-GAAP performance measures to further understand its “core operating performance” and believes its “core operating performance” is helpful in understanding its ongoing performance in the ordinary course of operations. The Company believes that providing such non-GAAP performance measures to investors, in addition to corresponding income statement measures, affords investors the benefit of viewing the Company’s performance using the same financial metrics that the management team uses in making many key decisions and understanding how the core business and its results of operations has performed. The tables below set forth such performance measures on an adjusted basis to exclude such items:

  Three Months Ended
March 31,
    2022       2021  
Net income $ 4,190     $ 4,311  
Net income as a percentage of revenues   1.8 %     2.3 %
Provision for income taxes   958       2,432  
Other income   (144 )     (138 )
Interest expense, net   5,164       5,404  
Expense from acquisition activities (i)   2,043       414  
Southbridge Landfill closure charge (ii)   140       157  
Depreciation and amortization   29,428       22,682  
Depletion of landfill operating lease obligations   1,813       1,604  
Interest accretion on landfill and environmental remediation liabilities   1,966       1,957  
Adjusted EBITDA $ 45,558     $ 38,823  
Adjusted EBITDA as a percentage of revenues   19.5 %     20.5 %
Depreciation and amortization   (29,428 )     (22,682 )
Depletion of landfill operating lease obligations   (1,813 )     (1,604 )
Interest accretion on landfill and environmental remediation liabilities   (1,966 )     (1,957 )
Adjusted Operating Income $ 12,351     $ 12,580  
Adjusted Operating Income as a percentage of revenues   5.3 %     6.6 %
               

 

  Three Months Ended
March 31,
    2022       2021  
Net income $ 4,190     $ 4,311  
Expense from acquisition activities (i)   2,043       414  
Southbridge Landfill closure charge (ii)   140       157  
Tax effect (iii)   (602 )     (131 )
Adjusted Net Income $ 5,771     $ 4,751  
       
Diluted weighted average common shares outstanding   51,657       51,387  
       
Diluted earnings per common share $ 0.08     $ 0.08  
Expense from acquisition activities (i)   0.04       0.01  
Southbridge Landfill closure charge (ii)          
Tax effect (iii)   (0.01 )      
Adjusted Diluted Earnings Per Common Share $ 0.11     $ 0.09  
               

(i) Expense from acquisition activities is primarily legal, consulting or other similar costs incurred during the period related to acquisition diligence, acquisition integration or select development projects as part of the Company’s strategic growth initiative.

(ii) Southbridge Landfill closure charge are expenses related to the unplanned early closure of the Southbridge Landfill along with associated legal activities. The Company initiated the unplanned, premature closure of the Southbridge Landfill in the fiscal year ended December 31, 2017 due to the significant capital investment required to obtain expansion permits and for future development coupled with an uncertain regulatory environment. The unplanned closure of the Southbridge Landfill reduced the economic useful life of the assets from prior estimates by approximately ten years. The Company expects to incur certain costs through completion of the closure process.

(iii) Tax effect of the adjustments is an aggregate of the current and deferred tax impact of each adjustment, including the impact to the effective tax rate, current provision and deferred provision. The computation considers all relevant impacts of the adjustments, including available net operating loss carryforwards and the impact on the remaining valuation allowance.

Non-GAAP Liquidity Measures

In addition to disclosing financial results prepared in accordance with GAAP, the Company also presents non-GAAP liquidity measures such as Adjusted Free Cash Flow that provide an understanding of the Company’s liquidity because it considers them important supplemental measures of its liquidity that are frequently used by securities analysts, investors and other interested parties in the evaluation of the Company’s cash flow generation from its core operations that are then available to be deployed for strategic acquisitions, growth investments, development projects, unusual landfill closures, site improvement and remediation, and strengthening the Company’s balance sheet through paying down debt. The Company also believes that identifying the impact of certain items as adjustments provides more transparency and comparability across periods. Management uses non-GAAP liquidity measures to understand the Company’s cash flow provided by operating activities after certain expenditures along with its consolidated net leverage and believes that these measures demonstrate the Company’s ability to execute on its strategic initiatives. The Company believes that providing such non-GAAP liquidity measures to investors, in addition to corresponding cash flow statement measures, affords investors the benefit of viewing the Company’s liquidity using the same financial metrics that the management team uses in making many key decisions and understanding how the core business and cash flow generation has performed. The tables below, in some instances on an adjusted basis to exclude certain items, set forth such liquidity measures:

  Three Months Ended
March 31,
    2022       2021  
Net cash provided by operating activities $ 24,714     $ 32,147  
Capital expenditures   (12,910 )     (26,832 )
Proceeds from sale of property and equipment   145       123  
Southbridge Landfill closure and Potsdam environmental remediation (i)   902       391  
Cash outlays from acquisition activities (ii)   1,106       268  
Post acquisition and development project capital expenditures (iii)   2,368       3,047  
Waste USA Landfill phase VI capital expenditures (iv)         1,100  
Adjusted Free Cash Flow $ 16,325     $ 10,244  
               

(i) Southbridge Landfill closure and Potsdam environmental remediation are cash outlays associated with the unplanned closure of the Southbridge Landfill and the Company’s portion of costs associated with environmental remediation at Potsdam, which are added back when calculating Adjusted Free Cash Flow due to their non-recurring nature and the significance of the related cash flows. The Company initiated the unplanned closure of the Southbridge Landfill in the fiscal year ended December 31, 2017 and expects to incur cash outlays through completion of the closure and environmental remediation process. The Potsdam site was deemed a Superfund site in 2000 and is not associated with current operations.

(ii) Cash outlays from acquisition activities are cash outlays for transaction and integration costs relating to specific acquisition transactions and include legal, environmental, valuation and consulting as well as asset, workforce and system integration costs as part of the Company’s strategic growth initiative.

(iii) Post acquisition and development project capital expenditures are (x) acquisition related capital expenditures that are necessary to optimize strategic synergies associated with integrating newly acquired operations as contemplated by the discounted cash flow return analysis conducted by management as part of the acquisition investment decision; and (y) non-routine development investments that are expected to provide long-term returns. Acquisition related capital expenditures include the following costs required to achieve initial operating synergies: trucks, equipment and machinery; and facilities, land, IT infrastructure or related upgrades to integrate operations.

(iv) Waste USA Landfill phase VI capital expenditures related to the Company’s landfill in Coventry, Vermont (“Waste USA Landfill”) phase VI construction and development that are added back when calculating Adjusted Free Cash Flow due to the specific nature of this investment in the development of long-term infrastructure which is different from landfill construction investments in the normal course of operations. This investment at the Waste USA Landfill is unique because the Company is investing in long-term infrastructure over an estimated four year period that will not yield a positive economic benefit until 2023 and extending over approximately 20 years.

Non-GAAP financial measures are not in accordance with or an alternative for GAAP. Adjusted EBITDA, Adjusted EBITDA as a percentage of revenues, Adjusted Operating Income, Adjusted Operating Income as a percentage of revenues, Adjusted Net Income, Adjusted Diluted Earnings Per Common Share, and Adjusted Free Cash Flow should not be considered in isolation from or as a substitute for financial information presented in accordance with GAAP, and may be different from Adjusted EBITDA, Adjusted EBITDA as a percentage of revenues, Adjusted Operating Income, Adjusted Operating Income as a percentage of revenues, Adjusted Net Income, Adjusted Diluted Earnings Per Common Share, and Adjusted Free Cash Flow presented by other companies.

CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES
UNAUDITED RECONCILIATION OF FISCAL YEAR 2022 OUTLOOK NON-GAAP MEASURES
(In thousands)

Following is a reconciliation of the Company’s estimated Adjusted EBITDA (i) from estimated Net income for fiscal year 2022:

  (Estimated) Fiscal Year Ending December 31, 2022
Net income $48,000 – $52,000
Provision for income taxes 20,000
Other income (1,000)
Interest expense, net 21,000
Expense from acquisition activities 2,500
Southbridge Landfill closure charge 1,000
Depreciation and amortization 125,500
Depletion of landfill operating lease obligations 8,000
Interest accretion on landfill and environmental remediation liabilities 7,000
Adjusted EBITDA $232,000 – $236,000
   

Following is a reconciliation of the Company’s estimated Adjusted Free Cash Flow (i) from estimated Net cash provided by operating activities for fiscal year 2022:

  (Estimated) Fiscal Year Ending December 31, 2022
Net cash provided by operating activities $204,000 – $208,000
Capital expenditures (125,000)
Proceeds from sale of property and equipment 500
Southbridge Landfill closure and Potsdam environmental remediation 6,500
Cash outlays from acquisition activities 1,500
Post acquisition and development project capital expenditures 16,500
Adjusted Free Cash Flow $104,000 – $108,000
   

(i) See footnotes for Non-GAAP Performance Measures and Non-GAAP Liquidity Measures included in the Reconciliation of Certain Non-GAAP Measures for further disclosure over the nature of the various adjustments to estimated Adjusted EBITDA and estimated Adjusted Free Cash Flow.

CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES
UNAUDITED SUPPLEMENTAL DATA TABLES
(In thousands)

Amounts of total revenues attributable to services provided for the three months ended March 31, 2022 and 2021 are as follows:

  Three Months Ended March 31,
    2022     % of Total
Revenues
    2021     % of Total
Revenues
Collection $ 119,531     51.1 %   $ 97,469     51.4 %
Disposal   43,153     18.4 %     37,853     20.0 %
Power generation   2,654     1.1 %     1,303     0.7 %
Processing   1,820     0.8 %     1,484     0.8 %
Solid waste operations   167,158     71.4 %     138,109     72.9 %
Processing   27,395     11.7 %     17,272     9.1 %
Non-processing   39,474     16.9 %     34,151     18.0 %
Resource solutions operations   66,869     28.6 %     51,423     27.1 %
Total revenues $ 234,027     100.0 %   $ 189,532     100.0 %
                           

Components of revenue growth for the three months ended March 31, 2022 compared to the three months ended March 31, 2021 are as follows:

  Amount   % of
Related
Business
  % of
Operations
  % of Total
Company
Solid waste operations:              
Collection $ 6,296     6.5 %   4.6 %   3.3 %
Disposal   1,506     4.0 %   1.0 %   0.8 %
Solid waste price   7,802         5.6 %   4.1 %
Collection   453         0.3 %   0.2 %
Disposal   322         0.2 %   0.1 %
Processing   (117 )       %   %
Solid waste volume   658         0.5 %   0.3 %
Surcharges and other fees   1,795         1.3 %   1.0 %
Commodity price and volume   1,579         1.1 %   0.8 %
Acquisitions   17,235         12.5 %   9.1 %
Closed operations   (20 )       %   %
Total solid waste operations   29,049         21.0 %   15.3 %
Resource solutions operations:              
Price   3,227         6.3 %   1.7 %
Volume   2,931         5.7 %   1.5 %
Acquisitions   9,288         18.0 %   5.0 %
Total resource solutions operations   15,446         30.0 %   8.2 %
Total company $ 44,495             23.5 %
                     

Solid waste internalization rates by region for the three months ended March 31, 2022 and 2021 are as follows: 

  Three Months Ended
March 31,
  2022   2021
Eastern region 39.7 %   49.9 %
Western region 55.6 %   61.5 %
Solid waste internalization 47.5 %   56.0 %
           

Components of capital expenditures (i) for the three months ended March 31, 2022 and 2021 are as follows: 

  Three Months Ended
March 31,
    2022       2021  
Growth capital expenditures:      
Post acquisition and development project $ 2,368     $ 3,047  
Waste USA Landfill phase VI         1,100  
Other   767       1,739  
Growth capital expenditures   3,135       5,886  
Replacement capital expenditures:      
Landfill development   1,560       1,289  
Vehicles, machinery, equipment and containers   6,672       17,568  
Facilities   1,145       650  
Other   398       1,439  
Replacement capital expenditures   9,775       20,946  
Capital expenditures $ 12,910     $ 26,832  
               

(i) The Company’s capital expenditures are broadly defined as pertaining to either growth or replacement activities. Growth capital expenditures are defined as costs related to development projects, organic business growth, and the integration of newly acquired operations. Growth capital expenditures include costs related to the following: 1) post acquisition and development projects that are necessary to optimize strategic synergies associated with integrating newly acquired operations as contemplated by the discounted cash flow return analysis conducted by management as part of the acquisition investment decision as well as non-routine development investments that are expected to provide long-term returns and includes the following capital expenditures required to achieve initial operating synergies: trucks, equipment and machinery; and facilities, land, IT infrastructure or related upgrades to integrate operations; 2) Waste USA Landfill phase VI construction and development for long-term infrastructure, which is unique and different from landfill construction investments in the normal course of operations because the Company is investing in long-term infrastructure over an estimated four year period that will not yield a positive economic benefit until 2023 and extending over approximately 20 years; and 3) development of new airspace, permit expansions, and new recycling contracts, equipment added directly as a result of organic business growth and infrastructure added to increase throughput at transfer stations and recycling facilities. Replacement capital expenditures are defined as landfill cell construction costs not related to expansion airspace, costs for normal permit renewals, and replacement costs for equipment due to age or obsolescence.

RUTLAND, Vt., April 28, 2022 (GLOBE NEWSWIRE) — Casella Waste Systems, Inc 

  

https://vermontbiz.com/news/2022/april/28/casella-posts-1q-2022-results-and-updates-fy22-guidance

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