Casella Waste Systems Profile
Casella Waste Systems, Inc. (Casella) operates as a regional, vertically integrated solid waste services company.
The company 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.
The company provides integrated solid waste services in nine states: Vermont, New Hampshire, New York, Massachusetts, Connecticut, Maine, Pennsylvania, Delaware and Maryland, with the company’s headquarters located in Rutland, Vermont. On June 30, 2023, the company acquired the equity interests of four wholly owned subsidiaries of GFL Environmental Inc., which are the basis of the company’s newly formed regional operating segment, the Mid-Atlantic region, that expanded the company’s integrated solid waste services into the states of Delaware and Maryland (the ‘GFL Acquisition’). Operations under the Mid-Atlantic region commenced on July 1, 2023.
The company manages its solid waste operations on a geographic basis through three regional operating segments, the Eastern, Western and Mid-Atlantic regions, each of which provides a comprehensive range of non-hazardous solid waste services. The company manages its resource renewal operations through the Resource Solutions operating segment, which leverages the company’s core competencies in materials processing, industrial recycling, organics and resource management service offerings to deliver a comprehensive solution for the company’s larger commercial, municipal, institutional and industrial customers that have more diverse waste and recycling needs. Legal, tax, information technology, human resources, certain finance and accounting and other administrative functions are included in the company’s Corporate Entities segment.
Growth Strategy
In February 2022, the company announced an updated long-term strategic plan through the fiscal year ending December 31, 2024 (the ‘2024 Plan’). The company executed well against the 2024 Plan in the fiscal year ended December 31, 2023 (‘fiscal year 2023’) and grew the company’s business meaningfully. Notably, the company closed on seven acquisitions in fiscal year 2023 within existing and adjacent geographies, including a new and expanded integrated solid waste services operating footprint in Pennsylvania, Maryland, and Delaware through the GFL Acquisition, as well as an expansion to the company’s collection, transfer, and recycling business in the greater Albany, New York area through the acquisition of the assets of Consolidated Waste Services, LLC and its affiliates (dba Twin Bridges), which was completed on September 1, 2023 (‘Twin Bridges Acquisition’). This positions the company’s business well to explore future operating and growth opportunities across both the Northeast as well as through the company’s new platform in the Mid-Atlantic over time.
The key strategies of the 2024 Plan reflect the company’s continued focus on creating shareholder value through execution against the company’s core competencies, disciplined growth strategy and strengthening foundational pillars, including increasing landfill returns; driving additional profitability in collection operations; creating incremental value through resource solutions; driving profitable growth through an integrated resource solutions approach; driving profitable growth and efficiencies through technology; and developing necessary long-term infrastructure through facilities planning.
Operational Overview
The company manages its solid waste operations, which are vertically integrated and include a full range of solid waste services, on a geographic basis through three regional operating segments, which the company designates as the Eastern, Western and Mid-Atlantic regions. Within each geographic region, the company organizes its solid waste services around smaller market areas that the company also refers to as ‘wastesheds’. The company typically operates several divisions within each market area, or wasteshed, each of which provides a particular service, such as collection, recycling, disposal or transfer. Each division operates interdependently with the other divisions within the market area. Each market area generally operates autonomously from adjoining market areas.
The company’s Eastern region consists of wastesheds located in Maine, northern, central and southeastern New Hampshire, central and eastern Massachusetts, and eastern Connecticut. The company’s Western region consists of wastesheds located in Vermont, southwestern New Hampshire, eastern, western and upstate New York, western Massachusetts, and in Pennsylvania around the company’s Subtitle D landfill located in Mount Jewett, Pennsylvania (‘McKean Landfill’). The company remain focused on increasing the company’s vertical integration in the company’s Western region through extension of the company’s reach into new markets. The company’s Mid-Atlantic region consists of wastesheds located in eastern Pennsylvania, Delaware and Maryland. The company began operations in these wastesheds in 2023 after the completion of the GFL Acquisition.
The company manages its resource renewal operations through the Resource Solutions operating segment, which leverages the company’s core competencies in materials processing, industrial recycling, organics and resource management service offerings to deliver a comprehensive solution for the company’s larger commercial, municipal, institutional and industrial customers that have more diverse waste and recycling needs. The Resource Solutions operating segment is not specific to a geography and is organized to leverage the company’s core competencies across its entire business footprint.
Solid Waste Operations
Solid waste operations within the company’s Eastern, Western and Mid-Atlantic regions consist of a comprehensive range of solid waste services. The company’s Eastern and Western regions are comprised primarily of solid waste collection, transfer station, and disposal facilities. Revenues derived from the company’s solid waste operations in the company’s Eastern and Western regions consist primarily of fees charged to customers for solid waste collection and disposal services, including landfill, transfer station and transportation, while also providing landfill gas-to-energy and processing services. The company’s Mid-Atlantic region is consisted of collection facilities and a transfer station facility. Revenues in the company’s Mid-Atlantic region consist primarily of fees charged to customers for solid waste collection and transfer services. The company derives a substantial portion of the company’s collection revenues from commercial, industrial and municipal services that are generally performed under service agreements or pursuant to contracts with municipalities. The majority of the company’s residential collection services are performed on a subscription basis with individual property owners or occupants. Landfill and transfer customers are charged a tipping fee on a per ton basis for disposing of their solid waste at the company’s disposal facilities and transfer stations. The company also generates and sells electricity, renewable energy credits, and energy capacity payments at certain of the company’s landfill facilities.
Collection: A majority of the company’s commercial and industrial collection services are performed under one-to-five year service agreements, with prices and fees determined by such factors as: collection frequency; type of equipment and containers furnished; type, volume and weight of solid waste collected; distance to the disposal or processing facility; and cost of disposal or processing. The company’s residential collection services are performed either on a subscription basis (with no underlying contract) with individuals, or through contracts with municipalities, homeowner associations, apartment building owners or mobile home park operators.
Transfer Stations: The company’s transfer stations receive, process and transfer solid waste, collected by the company’s various residential and commercial collection operations along with volumes from various third party service providers, for transport to disposal facilities by larger vehicles. Transfer stations benefit the company by increasing the size of the wastesheds, which have access to the company’s landfills or third-party disposal facilities; improving the utilization of collection personnel and equipment; and helping the company build relationships with municipalities and other customers by providing a local physical presence and enhanced local service capabilities.
Landfills: The company operates eight solid waste Subtitle D landfills and one landfill permitted to accept C&D materials. Revenues are received from municipalities and other customers in the form of tipping fees.
The company’s Eastern region consists of the following Subtitle D landfills located in Bethlehem, New Hampshire (‘NCES Landfll’) and West Old Town, Maine (‘Juniper Ridge Landfill’):
NCES Landfill. NCES Landfill is a Subtitle D landfill located in Bethlehem, New Hampshire that the company purchased in 1994. NCES Landfill consists of approximately 52 acres of permitted or permittable landfill area, and is permitted to accept 0.23 million cubic yards of municipal solid waste, C&D material and certain pre-approved special wastes annually. The company is party to an agreement for the construction of a landfill renewable natural gas (‘RNG’) facility, which will be constructed, owned and operated by a third-party.
Juniper Ridge Landfill. Juniper Ridge Landfill is a Subtitle D landfill located in West Old Town, Maine. In 2004, the company completed transactions with the state of Maine and Georgia-Pacific Corporation (‘Georgia Pacific’), pursuant to which the state of Maine took ownership of Juniper Ridge Landfill, formerly owned by Georgia Pacific, and the company became the operator under a 30-year operating and services agreement between the company and the state of Maine. Juniper Ridge Landfill consists of approximately 150 acres of permitted or permittable landfill area, which is sufficient to permit the additional airspace required for the term of the 30-year operating and services agreement, and is permitted to accept the following waste originating from the state of Maine: C&D material, ash from municipal solid waste incinerators and fossil fuel boilers, front end processed residuals and bypass municipal solid waste from waste-to-energy facilities and certain pre-approved special waste. Outside of the limitations on municipal solid waste, there are no annual tonnage limitations at Juniper Ridge Landfill. The company is party to an agreement for the construction of a landfill RNG facility plant at the Juniper Ridge Landfill, which will be constructed, owned and operated by a third-party.
The company’s Western region consists of the following Subtitle D landfills located in Coventry, Vermont (‘Waste USA Landfill’), Morrisonville, New York (‘Clinton County Landfill’), Angelica, New York (‘Hyland Landfill’), Seneca, New York (‘Ontario County Landfill’), Chemung, New York (‘Chemung County Landfill’) and McKean Landfill, and a C&D landfill located in Campbell, New York (‘Hakes Landfill’):
Waste USA Landfill. Waste USA Landfill is a Subtitle D landfill located in Coventry, Vermont that the company purchased in 1995, and is the only operating permitted Subtitle D landfill in the State of Vermont. Waste USA Landfill consists of approximately 144 acres of permitted or permittable landfill area and is permitted to accept up to 0.6 million tons of municipal solid waste, C&D material and certain pre-approved special waste annually. The Waste USA Landfill site houses a landfill gas-to-energy plant, which is owned and operated by a third-party, that has the capacity to generate 8.0 MW of energy.
Clinton County Landfill. Clinton County Landfill is a Subtitle D landfill located in Morrisonville, New York that the company has operated under an operating, management and lease agreement since 1996. Clinton County Landfill consists of approximately 197 acres of permitted or permittable landfill area, portions of which are leased from Clinton County, and other portions owned by the company, is permitted to accept up to approximately 0.3 million tons of municipal solid waste, C&D material and certain pre-approved special waste annually. The Clinton County Landfill site houses a landfill gas-to-energy facility, which the company ownss, but is operated by a third party, that has the capacity to generate 6.4 MW of energy.
Hyland Landfill. Hyland Landfill is a Subtitle D landfill located in Angelica, New York that the company owns, and that began accepting waste in 1998. Hyland Landfill consists of approximately 178 acres of permitted or permittable landfill area and is permitted to accept up to 0.5 million tons of municipal solid waste, C&D material and certain pre-approved special waste annually. The Hyland Landfill site houses a landfill gas-to-energy facility, which the company owns, but is operated by a third-party, that has the capacity to generate 4.8 MW of energy.
Ontario County Landfill. Ontario County Landfill is a Subtitle D landfill located in Seneca, New York. In 2003, the company entered into a 25-year operation, management and lease agreement for the Ontario County Landfill with the Ontario County Board of Supervisors. Ontario County Landfill consists of approximately 171 acres of permitted or permittable landfill area and is permitted to accept up to 0.9 million tons of municipal solid waste, C&D material and certain pre-approved special waste annually and is strategically situated to accept long haul volume from both the eastern and downstate New York markets. In January 2016, the company received an expansion permit at the Ontario County Landfill, which is sufficient to permit the additional airspace required for the remaining term of the 25-year operation, management and lease agreement. The Ontario County Landfill site houses a Zero-Sort MRF, which is operated by the company, and a landfill gas-to-energy facility, which is owned and operated by a third-party, that has the capacity to generate 11.2 MW of energy.
Hakes Landfill. Hakes Landfill is a C&D landfill located in Campbell, New York that the company purchased in 1998. Hakes Landfill consists of approximately 122 acres of permitted and permittable landfill area and is permitted to accept up to 0.5 million tons of C&D material annually.
Chemung County Landfill. Chemung County Landfill is a Subtitle D landfill located in Chemung, New York. In 2005, the company entered into a 25-year operation, management and lease agreement for Chemung County Landfill and certain other facilities with Chemung County. Chemung County Landfill consists of approximately 132 acres of permitted or permittable landfill area strategically situated to accept long haul volume from both eastern and downstate New York markets and is permitted to accept up to 0.4 million tons of municipal solid waste and certain pre-approved special waste annually and 20.5 thousand tons of C&D material annually. In the year ended December 31, 2016, the company received an expansion permit at Chemung County Landfill, which is sufficient to permit the additional airspace required for the remaining term of the 25-year operation, management and lease agreement. In 2019, the company exercised an option to extend the remaining term of the operation, management and lease agreement for up to five years through 2035.
McKean Landfill. McKean Landfill is a Subtitle D landfill located in Mount Jewett, Pennsylvania that the company purchased in 2011. McKean Landfill consists of approximately 256 acres of permitted or permittable landfill area and is permitted to accept up to approximately 1.6 million tons of municipal solid waste, C&D material and certain pre-approved special waste annually. The company is actively in the process of investing capital in the development of rail infrastructure to expand the market reach for the landfill to rail capable transfer facilities.
The company’s closed landfills consist of the following landfills:
In 2017, the company initiated a plan to cease operations of the Town of Southbridge, Massachusetts landfill (‘Southbridge Landfill’) and decided to not proceed with expansion efforts and to close Southbridge Landfill once the remaining capacity had been exhausted, which occurred in 2018. Closure operations, which began in November 2018 when Southbridge Landfill reached its final capacity, are ongoing. The site houses a landfill gas-to-energy facility, which the company owns, but is operated by a third-party, that has the capacity to generate 1.6 MW of energy.
In addition to Southbridge Landfill, the company owns and/or manages five unlined landfills and three lined landfills that are not in operation. The company is closing, in the case of Southbridge Landfill, or has closed and capped all of these landfills according to applicable environmental regulatory standards.
Resource Solutions
The company’s Resource Solutions operating segment was formed to leverage the company’s core competencies in materials processing, industrial recycling, organics and resource management service offerings in order to generate additional value from the waste stream for larger commercial, municipal, institutional and industrial customers with more diverse needs. Resource Solutions services are consisted of processing services and the company’s National Accounts business. The company also works to develop and/or partner with firms that have developed innovative approaches to deriving incremental value from the organic portion of the waste stream.
Processing. Processing services consist of the receipt of recycled, sludge or other organic materials at one of the company’s materials recovery, processing or disposal facilities, where it is then sorted, mixed and/or processed, and then repurposed, disposed of or sold. Revenues from processing services are derived from municipalities and customers in the form of processing fees, tipping fees, and commodity sales, primarily consisted of newspaper, corrugated containers, plastics, ferrous and aluminum, and organic materials such as the company’s earthlife soils products, including fertilizers, composts and mulches.
The company is one of the largest processors and marketers of recycled materials in the northeastern United States with facilities located in Vermont, New York, Maine, Connecticut, Massachusetts, and Pennsylvania, including the company’s eight large-scale, high volume MRFs, which utilize sophisticated processing operations, two of which are located in New York, two of which are located in Vermont, two of which are located in Massachusetts, one of which is located in Connecticut and one of which is located in Maine. Three of the eight MRFs are leased, four are owned, and one is operated by the company under a contract with a municipal third-party. The company’s MRFs receive, sort, bale and sell recyclable materials originating from the municipal solid waste stream, including newsprint, cardboard, office paper, glass, plastic, steel or aluminum containers and bottles. The company also operates smaller MRFs, which generally process recyclables collected from the company’s various residential and commercial collection operations.
A substantial portion of the recyclable materials provided is delivered pursuant to multiple long-term anchor contracts. The terms of the recycling contracts vary, but all of the contracts provide that the municipality or a third-party delivers the recycled materials to the company’s facility. These contracts may include a minimum volume guarantee by the municipality. The company also have service agreements with individual towns and cities and commercial customers, including small solid waste companies and major competitors, which do not have processing capacity within a specific geographic region. Under the recycling contracts, the company charge the municipality a fee for each ton of material delivered to the company. Some contracts contain revenue sharing arrangements under which the municipality receives a specified percentage of the company’s revenues from the sale of the recovered materials if certain economic thresholds are met. In fiscal year 2023, the company processed and/or marketed in total over 0.8 million tons of recyclable materials, including tons marketed through the company’s National Accounts business commodity brokerage division and the company’s baling facilities located throughout the company’s footprint.
National Accounts: The company’s National Accounts business consists of brokerage services and overall resource management services, which provide a wide range of environmental services and resource management solutions to large and complex organizations, as well as traditional collection, disposal and recycling services provided to large account multi-site customers. In brokerage arrangements, the company acts as an agent that facilitates the sale of recyclable and organic materials between an inbound customer and an outbound customer. Revenues from the brokerage of recycled materials are recognized on a net basis at the time of shipment. In overall resource management services, the company works with larger scale commercial or industrial organizations (including multi-location customers, colleges and universities, municipalities, and industrial customers) to develop customized solid waste and recycling solutions. The focus of this business is to help these large-scale organizations achieve their economic and environmental objectives related to waste and residual management.
Competition
The company’s business strategy generally focuses on operating in secondary or tertiary markets where the company has a strong market presence. However, in the larger urban markets where the company operates, the company typically competes against one or more of the large national solid waste companies, including Waste Management, Inc.; Republic Services, Inc.; and Waste Connections, Inc.
The company experiences significant competition to hire and retain individuals for certain front-line positions, such as commercial truck drivers, from within and outside the company’s industry. This competition comes from other waste management companies, as well as other employers who hire drivers and maintain fleets, such as companies that provide courier delivery services, including United Parcel Service, Inc., FedEx Corporation, and Amazon, as well as from a tightening labor market.
Sales and Marketing
The company has aligned its sales and marketing strategies with other customer-facing teams - Customer Care, Business Development, Sales Operations, Marketing, Community Engagement, and Sustainability - to better serve the company’s customers while delivering on several key strategic initiatives for sustainable growth.
As a part of the company’s resource management offering, the company serves customers with multiple locations and is focused on growing the company’s number of municipal, institutional, commercial and industrial customers. The company leverages broader service offerings of the Resource Solutions operating segment to provide customers with a full set of solutions to augment the company’s regional and divisional service capabilities.
The company holds a 19.9% ownership interest in Evergreen National Indemnity Company (‘Evergreen’), a surety company, which provides surety bonds to secure the company’s contractual obligations for certain municipal solid waste collection contracts and landfill closure and post-closure obligations. The company’s ownership interest in Evergreen is pledged to Evergreen as security for the company’s obligations under the bonds they provide on its behalf.
Customers
The company provides solid waste and recycling services to commercial, municipal, institutional, industrial and residential customers. A majority of the company’s commercial and industrial collection services are performed under one-to-five year service agreements. The company’s residential collection and disposal services are performed either on a subscription basis (with no underlying contract) with individuals, or through contracts with municipalities, homeowners' associations, apartment owners or mobile home park operators. The company provides recycling processing services to municipalities, commercial haulers and commercial waste generators within the geographic proximity of the processing facilities.
The company also provides brokerage services and overall resource management services, through a wide range of environmental service offerings, to large and complex organizations, as well as traditional collection, disposal and recycling services to large account multi-site customers.
Seasonality
The company’s revenues historically have been higher in the late spring, summer and early fall months. This seasonality reflects lower volumes of waste in the late fall, winter and early spring months because the volume of waste relating to C&D activities decreases substantially during the winter months in the eastern United States.
The company’s processing line-of-business in its Resource Solutions operating segment experiences increased volumes of recycled fibers from November through mid-January due to increased retail activity during the holiday season.
Regulation
The laws and regulations affecting the company are administered by the United States Environmental Protection Agency (‘EPA’) and other federal, state and local environmental, zoning, financial, health and safety agencies.
The principal federal statutes and regulations applicable to the company’s operations are the Resource Conservation and Recovery Act of 1976, as amended (‘RCRA’); the Federal Water Pollution Control Act of 1972, as amended (‘Clean Water Act’); the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended (‘CERCLA’); the Clean Air Act of 1970, as amended (‘Clean Air Act’); the Occupational Safety and Health Act of 1970, as amended (‘OSHA’); and the Public Utility Regulatory Policies Act of 1978, As Amended (‘PURPA’). The United States Environmental Protection Agency and environmental agencies within individual states in which the company operates continue to consider and promulgate changes to water quality standards, action levels, remediation goals, and other federal or state regulatory standards for individual compounds or classes of compounds.
History
Casella Waste Systems, Inc. was founded in 1975. The company was incorporated in 1993.
