Waste Connections (WCN) Q1 2023 Earnings Call Transcript

For the period ending March 31, 2023

April 27, 2023 8:30 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good day, and welcome to the Waste Connections Q1 2023 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Ron Mittelstaedt, President and CEO. Please go ahead.

Ronald Mittelstaedt

Okay. Thank you, operator, and good morning. I would like to welcome everyone to this conference call to discuss our first quarter results and to provide the detailed outlook for the second quarter. As many of you know, I was reappointed recently to the role of CEO, which I had held from the company’s inception 25 years ago, until July 2019. When I transitioned to Executive Chairman, I am pleased to have this opportunity to reconnect with so many of you that I’ve enjoyed working with over the years. I’m joined this morning by Mary Anne Whitney, our CFO, and several other members of our senior management team.

Looking at Q1, record solid waste pricing growth, strong operational execution, and continuing acquisition activity provided a strong start to the year. While we recognized on our February earnings call that Q1 would be a difficult year-over-year comparison, given the precipitous decline in resource recovery values during the second half of 2022. Results in the period were further affected by extraordinary weather-related impacts to solid waste roll-off activity and landfill volumes, particularly on the West Coast.

Underlying adjusted EBITDA margins were in line with our expectations, but acquisitions completed since the year-ago period were 30 points dilutive to reported margins, or more than 20 basis points higher than we had expected, given the disproportionate weather-related impacts on the West Coast acquisitions.

Continued visibility on pricing, improving trends and labor availability and retention and recent normalization of weather patterns position us to deliver the full year outlook we provided in February. And as we also noted then, any additional acquisitions, reduction of inflationary pressures, or increases in values for recycled commodities or renewable fuel, from the low levels we’ve seen since late last year would provide upside to this outlook. No improvement in those values was factored into our outlook.

Before we get into much more detail, let me turn the call over to Mary Anne for a forward-looking disclaimer, and other housekeeping items.