Casella Waste Systems, Inc.

Good day, and thank you for standing by, and welcome to Casella Waysystems Inc. Q3 2021 conference call. At this time, all participants are in listen-only mode. Please be advised that this call is being recorded. If you require any further assistance, please press star zero. I would now like to hand the conference over to Joe Fusco, VP of Communications. Please go ahead.

Thank you for joining us this morning, and welcome. This is our 97th earnings call. or if you've been binge-watching us, this is Season 24, Episode 3. With us today are John Casella, Chairman and Chief Executive Officer of Casella Waste Systems, Ed Johnson, our President and Chief Operating Officer, Ned Coletta, our Senior Vice President and Chief Financial Officer, and Jason Mead, our Vice President of Finance. Our recurring character is that train whistle. He joined us as well today. Today we will be discussing our 2021 third quarter results. These results were released yesterday afternoon, along with a brief review of those results and an update on the company's activities and business environment. We will be answering your questions as well. But first, as you know, I must remind everyone that various remarks that we may make about the company's future expectations, plans, and prospects constitute forward-looking statements for the purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by those forward-looking statements as a result of various important factors, including those discussed in the risk factor section of our most recent annual report on Form 10-K, which is on file with the SEC. In addition, any forward-looking statements represent our views only as of today, and should not be relied upon as representing our views as of any subsequent date. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if our views change. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to today. Also during this call, we will be referring to non-GAAP financial measures. These non-GAAP measures are not prepared in accordance with generally accepted accounting principles. Reconciliations of the non-GAAP financial measures to the most directly comparable GAAP measures, to the extent they are available without unreasonable effort, are available in the appendix to our investor slide presentation, which is available in the investor section of our website at ir.cosella.com. And with that, I'll turn it over to John Casella, who'll begin today's discussion.

Thanks, Joe. Good morning, everyone, and welcome to our third quarter 2021 conference call. We are very pleased with our performance and continued execution against our core strategies. In the third quarter, revenues and adjusted EBITDA were both up over 19% year over year. We also continue to drive adjusted free cash flow growth, and through the third quarter, adjusted free cash flow has increased over 37% compared to the same period in 2020. Our core solid waste and resource solutions businesses are performing at high levels as we continue to advance key pricing and operational strategies, which help ensure we stay ahead of inflationary costs related to labor, disposal, containers, and equipment. At the same time, we're growing our business meaningfully in a disciplined manner through strategic acquisitions and select development projects. So far this year, we've closed nine acquisitions with $86 million of annualized revenue. Most notably, this includes Willimantic Acquisition in Connecticut, which we announced in July. Since then, we've acquired four additional businesses within our operating footprint, including two transfer stations in the Buffalo market. Overall, the acquisition pipeline is robust, and we're actively working on several deals in various phases. Now, a brief update on the recent highlights performance against our key strategies. Starting with disposal, we continue to see modest volume recovery. Landfill tonnages were up slightly. in the third quarter compared to the same period last year. Volumes have not returned to pre-pandemic levels. This is almost entirely related to New York City and the surrounding area. With lower economic activity levels paired with labor stresses on third-party truckers that move the volume to our sites. That said, third-party volumes were generally in line with our expectations. Year to date, we've advanced 3.8 percent landfill price, as volumes come back into the system and as the Northeast disposal capacity continues to tighten, we'll have further opportunity to advance our pricing programs. Our operating programs at our disposal sites also continue to drive value. Ed and the team have done a nice job here improving key operating metrics and improving performance. From an RNG perspective, we have two projects in development that are slated to come online over the next year. And in both cases, third parties are deploying the capital, and we will benefit from the sale of landfill gas to that third party. Moving to the collection business, collection operations continue to perform very well. Ed and Ned will drive into some of the pricing, inflation, and volume trends. I wanted to discuss my commentary on people, our workforce, given the unique environment that we're in. From a labor perspective, our continued investment into our human resources technology programs has certainly helped to mitigate some of the challenges. Over the past several years, we have reset our labor rates in many markets, provided improved transparency through our career path initiatives, and have significantly invested in training, including our new CDL school. The outcome of these initiatives has helped to bring improved stability across our workforce while lowering turnover and improving retention. This has benefited us greatly through the past several months from a labor perspective. Ultimately, we have been able to maintain high levels of service excellence and accuracy during a challenging labor environment. And I also should mention the fact that we are focused so highly on keeping our people safe through the pandemic and rewarding them for their continued dedication to our customers. And the company, because of that, has without doubt enhanced our culture. Our continued investment in route optimization and automation has really helped us through this period. The work that Sean Steeves and his team are doing is really outstanding in terms of our ability to optimize our routes and fully automated and bring automation to those areas, particularly from an acquisition standpoint where we have nice opportunity to really gain efficiencies. We have gained labor efficiencies while widening our labor pool due to the increase in automation across the business. Simultaneously, we've improved the quality of our fleet, which has resulted in lower maintenance costs while improving the sentiment of our drivers and mechanics. Next, the resource solutions business. Both our recycling processing operations and our non-core business units are performing very well. We continue to make return-driven investment into our recycling processing facilities as we aim to gain further operational efficiencies while improving the quality of our end product. We've created a balanced business model that is economically and environmentally sustainable. As recycling commodity prices have increased, we've been able to share in the upside with our customers through lower tipping fees, a lower SRA fee, in the case of some materials, a higher rebate. While we also benefited from higher recycling commodity values, the flexibility and sophistication of our risk mitigation fee programs and contract structures protect us well on the downside should the market moderate into the future. And finally, in furthering highlight our capital allocation and growth strategy, acquisition activity continues to be strong. Our pipeline is very robust given the backdrop of labor challenges, heightened inflation, and tax reform. We are actively working on several opportunities that close late in 2021 or into next year. Our balance sheet and the strength of our team positions us well to execute against our growth strategy. Since August, we've completed four acquisitions. We look forward to fully integrating these businesses into our operations and continuing to provide a high level of service to our new customers. We also welcome aboard our new hardworking team members who are already making meaningful contributions to the company. Two of the four recent acquisitions helped strengthen our position in the Buffalo market while with additional hauling routes and related transfer stations provide an opportunity to vertically integrate volumes into our sites over time. Touching on Willimantic through the first three months post-acquisition, our team has displayed a high level of organization and collaboration as we work through the integration phase. The performance today has been sound, and we look forward to driving further value from our new platform in Connecticut. Wrapping up, Given our continued execution against key strategies and our outlook on the remainder of the year, we've again raised our 2021 guidance. This is our third raise on the year, which reflects the consistent solid performance of our team. We are excited about the opportunity to continue to grow the business and grow adjusted free cash flow. Importantly, as we grow, we are selectively adding the necessary resources and focusing on succession planning throughout the company. This serves to better position the organization for continued seamless execution to 22, as well as well beyond that. With that, I'll turn it over to Ned to walk through some of the financials.