
Casella Waste Systems, Inc. Announces Second Quarter 2024 Results And Recent Acquisitions; Updates Fiscal Year 2024 Guidance
CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except for per share data) | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||
Revenues | $ | 377,163 | $ | 289,645 | $ | 718,170 | $ | 552,241 | |||||||
Operating expenses: | |||||||||||||||
Cost of operations | 243,787 | 186,319 | 474,578 | 366,563 | |||||||||||
General and administration | 47,184 | 35,865 | 91,517 | 71,544 | |||||||||||
Depreciation and amortization | 55,338 | 34,924 | 109,375 | 68,359 | |||||||||||
Expense from acquisition activities | 7,836 | 3,677 | 12,847 | 6,540 | |||||||||||
Legal settlement | - | 6,150 | - | 6,150 | |||||||||||
Southbridge Landfill closure charge | - | 96 | - | 206 | |||||||||||
354,145 | 267,031 | 688,317 | 519,362 | ||||||||||||
Operating income | 23,018 | 22,614 | 29,853 | 32,879 | |||||||||||
Other expense (income): | |||||||||||||||
Interest expense, net | 12,697 | 7,390 | 25,767 | 13,664 | |||||||||||
Loss from termination of bridge financing | - | 8,198 | - | 8,198 | |||||||||||
Other income | (477 | ) | (452 | ) | (828 | ) | (800 | ) | |||||||
Other expense, net | 12,220 | 15,136 | 24,939 | 21,062 | |||||||||||
Income before income taxes | 10,798 | 7,478 | 4,914 | 11,817 | |||||||||||
Provision for income taxes | 3,792 | 1,988 | 2,025 | 2,779 | |||||||||||
Net income | $ | 7,006 | $ | 5,490 | $ | 2,889 | $ | 9,038 | |||||||
Basic weighted average common shares outstanding | 58,109 | 52,885 | 58,070 | 52,331 | |||||||||||
Basic earnings per common share | $ | 0.12 | $ | 0.10 | $ | 0.05 | $ | 0.17 | |||||||
Diluted weighted average common shares outstanding | 58,199 | 52,980 | 58,161 | 52,427 | |||||||||||
Diluted earnings per common share | $ | 0.12 | $ | 0.10 | $ | 0.05 | $ | 0.17 | |||||||
CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) | |||||||
June 30, 2024 | December 31, 2023 | ||||||
(Unaudited) | |||||||
ASSETS | |||||||
CURRENT ASSETS: | |||||||
Cash and cash equivalents | $ | 208,502 | $ | 220,912 | |||
Accounts receivable, net of allowance for credit losses | 161,247 | 157,324 | |||||
Other current assets | 56,055 | 48,089 | |||||
Total current assets | 425,804 | 426,325 | |||||
Property and equipment, net of accumulated depreciation and amortization | 987,390 | 980,553 | |||||
Operating lease right-of-use assets | 98,148 | 100,844 | |||||
Goodwill | 737,253 | 735,670 | |||||
Intangible assets, net of accumulated amortization | 216,961 | 241,429 | |||||
Other non-current assets | 46,309 | 50,649 | |||||
Total assets | $ | 2,511,865 | $ | 2,535,470 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
CURRENT LIABILITIES: | |||||||
Current maturities of debt | $ | 65,335 | $ | 35,781 | |||
Current operating lease liabilities | 8,854 | 9,039 | |||||
Accounts payable | 94,205 | 116,794 | |||||
Current accrued final capping, closure and post-closure costs | 9,280 | 10,773 | |||||
Other accrued liabilities | 92,014 | 106,471 | |||||
Total current liabilities | 269,688 | 278,858 | |||||
Debt, less current portion | 976,620 | 1,007,662 | |||||
Operating lease liabilities, less current portion | 65,710 | 66,074 | |||||
Accrued final capping, closure and post-closure costs, less current portion | 131,488 | 123,131 | |||||
Other long-term liabilities | 30,845 | 37,954 | |||||
Total stockholders' equity | 1,037,514 | 1,021,791 | |||||
Total liabilities and stockholders' equity | $ | 2,511,865 | $ | 2,535,470 | |||
CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) | |||||||
Six Months Ended June 30, | |||||||
2024 | 2023 | ||||||
Cash Flows from Operating Activities: | |||||||
Net income | $ | 2,889 | $ | 9,038 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 109,375 | 68,359 | |||||
Interest accretion on landfill and environmental remediation liabilities | 5,862 | 5,001 | |||||
Amortization of debt issuance costs | 1,482 | 1,505 | |||||
Stock-based compensation | 4,809 | 4,341 | |||||
Operating lease right-of-use assets expense | 8,489 | 6,872 | |||||
Disposition of assets, other items and charges, net | 3,209 | (300 | ) | ||||
Loss from termination of bridge financing | - | 8,198 | |||||
Deferred income taxes | 156 | 1,952 | |||||
Changes in assets and liabilities, net of effects of acquisitions and divestitures | (56,490 | ) | (21,770 | ) | |||
Net cash provided by operating activities | 79,781 | 83,196 | |||||
Cash Flows from Investing Activities: | |||||||
Acquisitions, net of cash acquired | 1,296 | (547,587 | ) | ||||
Additions to intangible assets | (199 | ) | - | ||||
Additions to property and equipment | (74,900 | ) | (50,415 | ) | |||
Proceeds from sale of property and equipment | 827 | 776 | |||||
Net cash used in investing activities | (72,976 | ) | (597,226 | ) | |||
Cash Flows from Financing Activities: | |||||||
Proceeds from debt borrowings | 1,750 | 430,000 | |||||
Principal payments on debt | (20,020 | ) | (10,625 | ) | |||
Payments of debt issuance costs | - | (7,185 | ) | ||||
Proceeds from the public offering of Class A common stock | - | 496,403 | |||||
Net cash (used in) provided by financing activities | (18,270 | ) | 908,593 | ||||
Net (decrease) increase in cash, cash equivalents and restricted cash | (11,465 | ) | 394,563 | ||||
Cash, cash equivalents and restricted cash, beginning of period | 220,912 | 71,152 | |||||
Cash, cash equivalents and restricted cash, end of period | $ | 209,447 | $ | 465,715 | |||
Supplemental Disclosure of Cash Flow Information: | |||||||
Cash interest payments | $ | 30,389 | $ | 14,196 | |||
Cash income tax payments | $ | 5,098 | $ | 7,913 | |||
Non-current assets obtained through long-term financing obligations | $ | 15,300 | $ | 4,715 | |||
Right-of-use assets obtained in exchange for operating lease obligations | $ | 3,154 | $ | 17,756 | |||
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 June 30, | Six Months Ended June 30, | ||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||
Net income | $ | 7,006 | $ | 5,490 | $ | 2,889 | $ | 9,038 | |||||||
Net income as a percentage of revenues | 1.9 | % | 1.9 | % | 0.4 | % | 1.6 | % | |||||||
Provision for income taxes | 3,792 | 1,988 | 2,025 | 2,779 | |||||||||||
Other income | (477 | ) | (452 | ) | (828 | ) | (800 | ) | |||||||
Loss from termination of bridge financing (i) | - | 8,198 | - | 8,198 | |||||||||||
Interest expense, net | 12,697 | 7,390 | 25,767 | 13,664 | |||||||||||
Southbridge Landfill closure charge (ii) | - | 96 | - | 206 | |||||||||||
Legal settlement (iii) | - | 6,150 | - | 6,150 | |||||||||||
Expense from acquisition activities (iv) | 7,836 | 3,677 | 12,847 | 6,540 | |||||||||||
Change in fair value of acquisition-related contingent consideration (v) | - | - | - | (589 | ) | ||||||||||
Depreciation and amortization | 55,338 | 34,924 | 109,375 | 68,359 | |||||||||||
Depletion of landfill operating lease obligations | 2,497 | 2,230 | 4,695 | 4,303 | |||||||||||
Interest accretion on landfill and environmental remediation liabilities | 2,926 | 2,491 | 5,862 | 5,001 | |||||||||||
Adjusted EBITDA | $ | 91,615 | $ | 72,182 | $ | 162,632 | $ | 122,849 | |||||||
Adjusted EBITDA as a percentage of revenues | 24.3 | % | 24.9 | % | 22.6 | % | 22.2 | % | |||||||
Depreciation and amortization | (55,338 | ) | (34,924 | ) | (109,375 | ) | (68,359 | ) | |||||||
Depletion of landfill operating lease obligations | (2,497 | ) | (2,230 | ) | (4,695 | ) | (4,303 | ) | |||||||
Interest accretion on landfill and environmental remediation liabilities | (2,926 | ) | (2,491 | ) | (5,862 | ) | (5,001 | ) | |||||||
Adjusted Operating Income | $ | 30,854 | $ | 32,537 | $ | 42,700 | $ | 45,186 | |||||||
Adjusted Operating Income as a percentage of revenues | 8.2 | % | 11.2 | % | 5.9 | % | 8.2 | % | |||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||
Net income | $ | 7,006 | $ | 5,490 | $ | 2,889 | $ | 9,038 | |||||||
Loss from termination of bridge financing (i) | - | 8,198 | - | 8,198 | |||||||||||
Southbridge Landfill closure charge (ii) | - | 96 | - | 206 | |||||||||||
Legal settlement (iii) | - | 6,150 | - | 6,150 | |||||||||||
Expense from acquisition activities (iv) | 7,836 | 3,677 | 12,847 | 6,540 | |||||||||||
Change in fair value of acquisition-related contingent consideration (v) | - | - | - | (589 | ) | ||||||||||
Interest expense from acquisition activities (vi) | - | 496 | - | 496 | |||||||||||
Tax effect (vii) | (2,325 | ) | (5,276 | ) | (4,008 | ) | (5,933 | ) | |||||||
Adjusted Net Income | $ | 12,517 | $ | 18,831 | $ | 11,728 | $ | 24,106 | |||||||
Diluted weighted average common shares outstanding | 58,199 | 52,980 | 58,161 | 52,427 | |||||||||||
Diluted earnings per common share | $ | 0.12 | $ | 0.10 | $ | 0.05 | $ | 0.17 | |||||||
Loss from termination of bridge financing (i) | - | 0.16 | - | 0.16 | |||||||||||
Southbridge Landfill closure charge (ii) | - | - | - | - | |||||||||||
Legal settlement (iii) | - | 0.12 | - | 0.12 | |||||||||||
Expense from acquisition activities (iv) | 0.13 | 0.07 | 0.22 | 0.12 | |||||||||||
Change in fair value of acquisition-related contingent consideration (v) | - | - | - | (0.01 | ) | ||||||||||
Interest expense from acquisition activities (vi) | - | 0.01 | - | 0.01 | |||||||||||
Tax effect (vii) | (0.03 | ) | (0.10 | ) | (0.07 | ) | (0.11 | ) | |||||||
Adjusted Diluted Earnings Per Common Share | $ | 0.22 | $ | 0.36 | $ | 0.20 | $ | 0.46 | |||||||
(i) Loss from termination of bridge financing is related to the write-off of the remaining unamortized debt issuance costs associated with the extinguishment of bridge financing agreements associated with acquisitions.
(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) Legal settlement is related to reaching an agreement in June 2023 with the collective class members of a class action lawsuit relating to certain Fair Labor Standards Act of 1938 ("FLSA") claims as well as state wage and hours laws. The agreement remains subject to court approval.
(iv) Expense from acquisition activities is comprised primarily of legal, consulting, rebranding and other costs associated with the due diligence, acquisition and integration of acquired businesses. The three and six months ended June 30, 2024 included a charge for an increase in the reserve against accounts receivable of the businesses acquired in the GFL Acquisition as a result of our inability to pursue collections during the transition services period with the seller, resulting in accounts receivable aged beyond what is typical in our business.
(v) Change in fair value of acquisition-related contingent consideration is associated with the change in fair value of a contingency related to a previous acquisition based upon a probability-weighted analysis of the potential attainment of a transfer station permit expansion.
(vi) Interest expense from acquisition activities is the amortization of debt issuance costs during the three and six months ended June 30, 2023 associated primarily with transaction, legal, and other similar costs incurred during the periods associated with bridge financing activities related to acquisitions.
(vii) 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 showing 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 table below, on an adjusted basis to exclude certain items, sets forth such liquidity measures:
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||
Net cash provided by operating activities | $ | 72,102 | $ | 67,117 | $ | 79,781 | $ | 83,196 | |||||||
Capital expenditures | (44,649 | ) | (32,536 | ) | (74,900 | ) | (50,415 | ) | |||||||
Proceeds from sale of property and equipment | 339 | 361 | 827 | 776 | |||||||||||
Southbridge Landfill closure (i) | 787 | 1,088 | 1,482 | 2,337 | |||||||||||
Cash outlays from acquisition activities (ii) | 4,941 | 5,195 | 9,435 | 6,059 | |||||||||||
Acquisition capital expenditures (iii) | 6,571 | 3,922 | 12,659 | 5,012 | |||||||||||
McKean Landfill rail capital expenditures (iv) | 1,030 | 479 | 3,225 | 903 | |||||||||||
FLSA legal settlement payment (v) | - | - | 6,150 | - | |||||||||||
Landfill capping charge - veneer failure payment (vi) | 794 | - | 850 | - | |||||||||||
Adjusted Free Cash Flow | $ | 41,915 | $ | 45,626 | $ | 39,509 | $ | 47,868 | |||||||
(i) Southbridge Landfill closure are cash outlays associated with the unplanned, early closure of the Southbridge Landfill. The Company initiated the unplanned, premature 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.
(ii) Cash outlays from acquisition activities are cash outlays for transaction and integration costs relating to specific acquisition transactions and include legal, consulting, rebranding and other costs as part of the Company's strategic growth initiative.
(iii) Acquisition capital expenditures are 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. Acquisition related capital expenditures include costs required to achieve initial operating synergies and integrate operations.
(iv) McKean Landfill rail capital expenditures are long-term infrastructure capital expenditures related to rail side development at the Company's landfill in Mount Jewett, PA ("McKean Landfill"), which is different from the landfill construction investments in the normal course of operations.
(v) FLSA legal settlement payment is the cash outlay of a legal settlement related to reaching an agreement in June 2023 with the collective class members of a class action lawsuit relating to certain claims under the FLSA as well as state wage and hours laws.
(vi) Landfill capping charge - veneer failure payment is the cash outlay associated with operating expenses incurred to clean up the affected capping material at the Company's landfill in Seneca, New York. Engineering analysis is currently underway to determine root causes and responsibility for the event.
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 2024 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 2024:
(Estimated) Twelve Months Ending December 31, 2024 | |
Net income | $15,000 - $25,000 |
Provision for income taxes | 11,000 |
Other income | (1,500) |
Interest expense, net | 57,000 |
Southbridge Landfill closure charge | 1,000 |
Expense from acquisition activities | 20,000 |
Depreciation and amortization | 236,000 |
Depletion of landfill operating lease obligations | 10,000 |
Interest accretion on landfill and environmental remediation liabilities | 11,500 |
Adjusted EBITDA | $360,000 - $370,000 |
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 2024:
(Estimated) Twelve Months Ending December 31, 2024 | |
Net cash provided by operating activities | $245,000 - $255,000 |
Capital expenditures | (187,000) |
Proceeds from sale of property and equipment | 1,500 |
FLSA legal settlement payment | 6,150 |
Southbridge Landfill closure | 3,000 |
Acquisition capital expenditures | 46,500 |
Cash outlays from acquisition activities | 17,000 |
McKean Landfill rail capital expenditures | 7,000 |
Landfill capping charge - veneer failure payment | 850 |
Adjusted Free Cash Flow | $140,000 - $150,000 |
(i) See footnotes for Non-GAAP Performance Measures and Non-GAAP Liquidity Measures included in the Unaudited 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 and six months ended June 30, 2024 and 2023 are as follows:
Three Months Ended June 30, | |||||||||||||||
2024 | % of Total Revenues | 2023 | % of Total Revenues | ||||||||||||
Collection | $ | 223,959 | 59.4 | % | $ | 149,848 | 51.7 | % | |||||||
Disposal | 65,123 | 17.3 | % | 63,629 | 22.0 | % | |||||||||
Landfill gas-to-energy | 1,983 | 0.5 | % | 1,321 | 0.5 | % | |||||||||
Processing | 2,880 | 0.7 | % | 2,754 | 0.9 | % | |||||||||
Solid waste operations | 293,945 | 77.9 | % | 217,552 | 75.1 | % | |||||||||
Processing | 33,275 | 8.9 | % | 25,383 | 8.8 | % | |||||||||
National Accounts | 49,943 | 13.2 | % | 46,710 | 16.1 | % | |||||||||
Resource Solutions operations | 83,218 | 22.1 | % | 72,093 | 24.9 | % | |||||||||
Total revenues | $ | 377,163 | 100.0 | % | $ | 289,645 | 100.0 | % | |||||||
Six Months Ended June 30, | |||||||||||||||
2024 | % of Total Revenues | 2023 | % of Total Revenues | ||||||||||||
Collection | $ | 435,318 | 60.6 | % | $ | 289,825 | 52.5 | % | |||||||
Disposal | 115,262 | 16.0 | % | 115,096 | 20.8 | % | |||||||||
Power generation | 4,493 | 0.6 | % | 3,245 | 0.6 | % | |||||||||
Processing | 4,808 | 0.8 | % | 4,329 | 0.8 | % | |||||||||
Solid waste operations | 559,881 | 78.0 | % | 412,495 | 74.7 | % | |||||||||
Processing | 63,038 | 8.7 | % | 48,189 | 8.7 | % | |||||||||
National Accounts | 95,251 | 13.3 | % | 91,557 | 16.6 | % | |||||||||
Resource Solutions operations | 158,289 | 22.0 | % | 139,746 | 25.3 | % | |||||||||
Total revenues | $ | 718,170 | 100.0 | % | $ | 552,241 | 100.0 | % | |||||||
Components of revenue growth for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 are as follows:
Amount | % of Related Business | % of Operations | % of Total Company | ||||||||||||
Solid waste operations: | |||||||||||||||
Collection | $ | 9,234 | 6.2 | % | 4.2 | % | 3.2 | % | |||||||
Disposal | 3,059 | 4.8 | % | 1.5 | % | 1.0 | % | ||||||||
Solid waste price | 12,293 | 5.7 | % | 4.2 | % | ||||||||||
Collection | (1,762 | ) | (1.2 | )% | (0.8 | )% | (0.6 | )% | |||||||
Disposal | (2,199 | ) | (3.5 | )% | (1.0 | )% | (0.8 | )% | |||||||
Processing | (8 | ) | - | % | - | % | |||||||||
Solid waste volume | (3,969 | ) | (1.8 | )% | (1.4 | )% | |||||||||
Surcharges and other fees | 500 | 0.1 | % | 0.2 | % | ||||||||||
Commodity price and volume | 797 | 0.4 | % | 0.3 | % | ||||||||||
Acquisitions | 66,772 | 30.7 | % | 23.1 | % | ||||||||||
Total solid waste operations | 76,393 | 35.1 | % | 26.4 | % | ||||||||||
Resource Solutions operations: | |||||||||||||||
Price | 3,129 | 4.3 | % | 1.1 | % | ||||||||||
Volume | 4,793 | 6.7 | % | 1.6 | % | ||||||||||
Surcharges and other fees | (59 | ) | (0.1 | )% | - | % | |||||||||
Acquisitions | 3,262 | 4.5 | % | 1.1 | % | ||||||||||
Total Resource Solutions operations | 11,125 | 15.4 | % | 3.8 | % | ||||||||||
Total Company | $ | 87,518 | 30.2 | % | |||||||||||
Components of capital expenditures ( i ) for the three and six months ended June 30, 2024 and 2023 are as follows:
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||
Growth capital expenditures: | |||||||||||||||
Acquisition capital expenditures | $ | 6,571 | $ | 3,922 | $ | 12,659 | $ | 5,012 | |||||||
McKean Landfill rail capital expenditures | 1,030 | 479 | 3,225 | 903 | |||||||||||
Other | 2,358 | 2,502 | 4,992 | 3,898 | |||||||||||
Growth capital expenditures | 9,959 | 6,903 | 20,876 | 9,813 | |||||||||||
Replacement capital expenditures: | |||||||||||||||
Landfill development | 13,606 | 9,736 | 17,808 | 11,198 | |||||||||||
Vehicles, machinery, equipment and containers | 15,491 | 11,973 | 28,245 | 19,772 | |||||||||||
Facilities | 4,447 | 2,515 | 6,009 | 6,570 | |||||||||||
Other | 1,146 | 1,409 | 1,962 | 3,062 | |||||||||||
Replacement capital expenditures | 34,690 | 25,633 | 54,024 | 40,602 | |||||||||||
Capital expenditures | $ | 44,649 | $ | 32,536 | $ | 74,900 | $ | 50,415 | |||||||
(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) acquisition 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 includes the capital expenditures required to achieve initial operating synergies and integrate operations; 2) McKean Landfill rail capital expenditures, which is unique and different from landfill construction investments in the normal course of operations because the Company is investing in long-term infrastructure; 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, replacement costs for equipment and other capital expenditures due to age or obsolescence, and capital items not defined as growth capital expenditures.


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