Good day, and thank you for standing by. Welcome to the Casella Waste Systems, Inc. Q2 2025 conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Brian Butler, VP of Investor Relations. Please go ahead.

Thank you, Daniel. Good morning, and thank you for joining us on the call. Today, we'll be discussing our second quarter 2025 results, which were released yesterday afternoon. This morning, I'm joined with John Casella, Chairman and Chief Executive Officer of Casella Waste Systems, Neg Valetta, our President, Brad Helgeson, our Chief Financial Officer, and Sean Steeves, our Senior Vice President and Chief Operating Officer of Solid Waste Operations. After a review of these results and an update on the company's activities and business environment, we'll be happy to take your questions. But first, please note that various remarks 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 these forward-looking statements as a result of various important factors, including those discussed in the risk factors section of our most recent Form 10-Q, 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 on 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 August 1st all will be referring to non-GAAP financial measures these non-GAAP measures are not prepared in accordance with generally accepted accounting principles right Reconciliations of the non-GAAP financial measures to the most directly comparable GAAP measures, to the extent they are available without unreasonable effort, are included in our press release filed on Form 8K, which will begin our discussion. John?

Thanks, Brian. In June, we proudly rang the NASDAQ opening bell to commemorate Pesela's 50th anniversary. This milestone marks our evolution from a single truck operation in Vermont to a leading provider of waste, recycling, and resource management services across the Northeast and now into the Mid-Atlantic. Over five decades of growth, our dedicated team has consistently delivered exceptional service and industry leadership, all while staying true to our core values and working toward a cleaner, more sustainable future. I'd like to sincerely thank all of our employees for their grit, hard work, and commitment every day. The celebration was not only a reflection of our past, but also a re-affirmation of our vision for the future, it highlighted the strength of our culture, the resilience of our business model, and the deep trust we've built with our customers and communities. We're incredibly proud of the legacy we've created and energized by the opportunities ahead. Turning to the quarter, we've delivered another strong performance in Q2. With robust growth in both revenue and adjusted EBITDA, Year-to-date, we've achieved record first-half adjusted free cash flow over $70 million, more than $30 million above the same period last year. These results reflect solid execution, meaningful contributions from our recent acquisitions. Pricing remains healthy with solid waste pricing up 5% year-over-year. We continue to execute well on our operating plans, driving meaningful margin improvement across our legacy business, This performance has been partially offset by some growing pains in the Mid-Atlantic as we work through the transition to our systems and getting the acquired fleet up to our standards. We are executing on a plan to rapidly get this performance on track. Elsewhere, landfill volumes were up nicely year over year, and our resource solutions segment continued to perform very well, driven by improved performance at our upgraded recycling facilities. We've now completed six acquisitions year-to-date, representing about $90 million in annualized revenues, and we're excited about the pending acquisition of Mountain State Waste, which will expand our footprint in Pennsylvania and also into West Virginia, adding another $30 million in annualized revenues. Look forward to welcoming their employees and customers to the Casella family and integrating their operations into our broader network. Our M&A pipeline remains full of targets that align perfectly with our strategy, and our strong balance sheet positions us to continue to pursue and complete these deals opportunistically. Looking ahead, we raised our full year revenue guidance, reflecting on the continued strength of our core pricing and acquisition activity, and reaffirmed our adjusted EBITDA and adjusted free cash flow guidance ranges, representing another year of record financial results. And with that, I'll turn it over to Brad to walk through the financials in more detail.

Thanks, John. Good morning, everyone. Revenues in the second quarter were $465.3 million, up $88.2 million, or 23.4% year-over-year, with $67.1 million from acquisitions, including rollover, and $21 million from organic growth, or 5.6%. Solid waste revenues were up 27.1% year-over-year with price up 5% and volume down 0.8%. Within solid waste, price in the collection line of business was up 4.9% in the quarter led by 5.9% price in front-load commercial and volume was down 1.2%. However, year-over-year volume trends improved from in the first quarter with indications of a stable economy in our markets. Price in the disposal line of business was up 5.8% and volume up 0.6% year over year. Results in the landfill business were strong with total tons up nine and a half percent including higher third-party MSW and C&D volumes and over 12% growth in internalized volumes. We feel that we have meaningful opportunities to grow volumes further at our sites, but it's safe to say that the persistent market headwinds that we experienced last year are behind us. We drove price 8.2% at the transfer stations with flat volume in the quarter. Resource solutions revenues were up 10.2% year over year with recycling and other processing revenue up 9.6% and national accounts up 10.6%. Within resource solutions processing operations, Our average recycled commodity sales price was down 16% year over year, with softer markets across the board and most commodities now selling below five-year averages. Notwithstanding market pressures, our contract structures share this risk with our customers by adjusting tip fees in down markets. So the net impact of lower prices on our revenue was just 1.6%, or less than a million dollars. Processing volume in revenue terms was up 8.6%, driven by higher volumes at the Boston and Willimantic recycling facilities. Within national accounts revenue, price was up 5.9% and volume up 1.9%. Adjusted EBITDA was $109.5 million in the quarter, up 17.9 million or 19.5% year-over-year, with contribution from acquisitions, including rollover and organic growth. Adjusted EBITDA margin was 23.5% in the quarter, down to approximately 75 basis points year over year. Bridging the year over year change in adjusted EBITDA margin, acquisitions contributing at lower initial margins than our overall business presented a headwind of 85 basis points. The base business on a same store basis expanded margins by 10 basis points overall, with legacy footprint operations growing margins by over 100 basis points, but the Mid-Atlantic region representing a near-term headwind as we continue to work through business integration and synergy execution impacted by ongoing system conversions and delays in truck deliveries. I should note that these headwinds are transitory and represent margin expansion opportunity in the future, which we expect to see in 2026. Cost of operations were $308.1 million in the quarter, up $64.3 million year-over-year, with $48.2 million of the increase from acquisitions and $16.1 million in the base business. General and administrative costs were $54.5 million in the quarter, up $7.3 million year-over-year. Depreciation and amortization costs were up $21.7 million year-over-year, with $16.1 million resulting from the recent acquisition activity, including the amortization of acquired intangibles. As a reference, DNA associated with acquisitions was approximately 24% of acquired revenues in the quarter as compared to 15% of our base business. Adjusted net income was $23 million in the quarter or $0.36 per diluted share, up $1.3 million and down one cent per share. Gap net income was $5.2 million in the quarter, impacted by a $6.9 million increase in amortization of acquired intangibles. Net cash provided by operating activities was $139.6 million in the first six months of 2025, up $59.9 million year-over-year, driven by EBITDA growth and more normalized seasonal working capital flows as compared to 2024. DSO was 34 days down two days from year end and four days year over year. Adjusted free cash flow was $70.8 million, a record for the first six months and representing approximately 40% of our full year guidance. Capital expenditures were $121.9 million, up $47 million year over year, including $40 million of upfront one-time investment in recent acquisitions. As of June 30, we had $1.16 billion of debt and $218 million of cash. Our consolidated net leverage ratio for purposes of our bank covenants was 2.39 times, and our $700 million revolver remained undrawn. Our liquidity and leverage profile will enable us to be optimistic in continuing to execute our growth strategy and robust M&A pipeline. As announced in our press release yesterday, We updated some of our guidance ranges for 2025. We raised our revenue guidance to a midpoint of $1.83 billion in light of acquisition activity to date. However, we reaffirmed our range on adjusted EBITDA as the contribution from our announced acquisition activity since establishing guidance has not yet exceeded the original range, and we remain cautious on the pace of synergy execution this year in the Mid-Atlantic region. We also raised the bottom end of our ranges on adjusted free cash flow and cash flow from operating activities based on the strength of cash flow year to date and our confidence in the second half. Regarding cash flow, I should note that we will not see a benefit from the recent tax legislation in 2025 as we would not have been a federal cash taxpayer in any event. However, the provisions of the tax bill, most significantly the reinstatement of bonus appreciation will certainly benefit our tax position in the future, deferring and ultimately reducing our eventual federal cash tax burden. With that, I'll turn it over to Ned. Thanks, Brad,

and good morning, everyone. As highlighted in earnings release yesterday, we delivered another strong quarter of growth with solid performance across key financial metrics. Organic trends remain positive in the second quarter, with solid waste pricing up 5% year-over-year and total company volumes up 30 basis points with particular strength and resource solutions and landfill lines. Collection operations made meaningful improvements. We completed 11 routing projects that reduced both route days and driver headcount requirements. Operational productivity in our eastern and western regions remained strong with direct labor and overtime cost flat on a trailing 12 months basis. This helped to offset cost pressures in our mid Atlantic region where labor costs are currently running hundreds of basis points. As John mentioned, truck delivery delays and system conversions in the Mid-Atlantic had a domino impact in the quarter, delaying route optimization, automation, and other cost synergies from being recognized as quickly as expected. We do expect 55 additional trucks to deliver in late 2025 to the Mid-Atlantic region with nearly 40 of these trucks. In our resource solution segment, adjusted EBITDA increased 1.8 million dollars in the second quarter mainly driven by improved efficiencies that are recently upgraded Willimantic and Boston recycling products. This operational strength landfill by McKean Landfill and at that time will work to drive additional internalization to the site and also selectively attract. We also continue to execute well against our acquisition strategy as John mentioned closing three additional deals in the second quarter totaling over $40 million of annualized revenues. Additionally, we're really excited about the agreement to acquire Mountain State Waste, which will expand our geographic footprint and add an incremental $30 million of annualized revenues. As we enter the second half of 2025, our acquisition pipeline remains robust with over $500 million of annualized revenue opportunities. Our balance sheet remains strong with leverage under 2.4 times in total liquidity of the process. Our outlook for the remainder of 2025 remains positive, supported by continued execution of our acquisition strategy in a resilient, sustainable organic growth model. Our limited exposure to commodity prices and tariffs further reinforces our confidence in delivering consistent results. With that, I'll turn it back to the operator for questions. Thank you.

you. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. Our first question comes from Tyler Brown with Raymond

James. Your line is open. Hey, good morning, guys. Can you all hear me? Sure can. Yeah, good morning, Tyler. Hey, morning. So, Ned, can we just kind of start with the Mid-Atlantic? So, it seems like maybe that group is lagging a little bit maybe can you talk about some of the reasons why and I think you're implementing an ERP there but big picture once that new system is in place won't there be a substantial pricing opportunity in that market in 26 because I was under the impression that pushing price was kind of call it logistically difficult and cash cash collections were kind of

slow on that legacy system yeah great question Tyler um so if we flash back in time there's always those moments where you make a R&D decision, and we maybe made one that's been a little bit painful. When we acquired the businesses originally from GFL, we decided to actually stay in the same billing operating system they had been operating. And it was more of an R&D decision for us to see how it would work and if it was something that would work for the rest of our business. Flash forward, it's not a great system. There's not great analytics is not great, routing capabilities. There's a lot of issues. So about nine months ago, eight months ago, we decided to move to our legacy billing system, which has stood to test the time. It's been amazing, called SoftPack, but upgrading to the latest version. So we're very rapidly doing so in the mid-Atlantic, but as I mentioned, it is a bit of a domino effect because not all those businesses are running in the exact same billing system today. We haven't been able to move all newly acquired businesses onto that system. And then the truck delays just compounds the whole thing where we haven't been able to get automation routing synergies. So we're not feeling bad about our plans or our synergy expectations. It's just taking longer so your question about pricing you're 100 right about that there's not the same level of visibility around elasticity around pricing that we have in our in our legacy system so um there is opportunity there as well okay so i'll try to ask this question we'll see what you

give me but what would you say the synergy ebitda benefit could be from that that group of assets in I mean, is this a couple million bucks or is this 10 million or more, just any color?

Yeah, so we haven't fully built out our budget for next year, and we're still working through the steps here. But on the routing side, this will come in over the course of a couple of years, as you're aware. And we have said there is ultimately as much as, you know, six, five, six, seven million dollars of benefit over several years as we automate that fleet. on the back office side um there's millions of dollars of benefit over you know i wouldn't say it's all at once but as we get the systems issues resolved so um you're looking at you know five to ten million dollars over a couple of years we'll give a better idea on the pacing of that when we

get our budget pulled together okay yeah that's very helpful and then can we turn to mountain state. So, I'm just kind of curious about what some of the dynamics are in West Virginia. Is that a disposal neutral market? Can you internalize that through a transfer station? Just what's the market structure there? And then it looks like they have a really nice set of assets. Will that kind of serve as a mini platform in that region? It will. You know,

the majority of a good portion of the assets are in Pennsylvania and the expansion into West Virginia the expansion into West Virginia is through into Morgantown which is a very it's a terrific MSA in West Virginia a lot of growth there because of the university so it's a secondary tertiary market that we're similar you know similar to some of our other markets I think that there is an opportunity for us to continue to build off of that platform there are operations we do go into Ohio and Kentucky with the West Virginia assets so there is an opportunity for us to add to that platform on a go-forward basis as you

may be aware it's a franchise market so they have these lifetime franchise agreements that come with part of the acquisition and in those markets we would either be the sole provider, or there might be several providers, but you have a franchise agreement where you're picking up customers within a defined rate structure. But it's a very nice, well-run, profitable business with great assets. Yeah, definitely looks like it. My last one here,

Brad, this is a minutiae modeling question, but why did the interest expense guidance drop so much. Was that, I mean, it doesn't look like the debt balance really moved and I'm doubting the

coupon move that much. Just what was going on there? I think just as the year progresses, you know, we're just refining our view and letting some of the conservatism on that line out

is really the bottom line. Okay. Yeah. I just wanted to go over that. All right. Thank you,

guys. Thank you. Thank you. Our next question comes from Adam Hubess with Goldman Sachs,

your line is open. Hi, good morning. Just had a follow-up on the mid-Atlantic dynamic. Just to put a finer point on it, is this a case where it's slower than expected synergy realization, or are we also realizing incremental costs in the mid-Atlantic year-over-year that's impacting that margin bridge associated with integration? It's just slower synergy realization.

We expected trucks to deliver sooner, which would have allowed us to do more automation, taking other trucks, labor off the road. We've also, as I mentioned with Tyler, we really are having to move back to a legacy Casella order-to-cash system with an upgrade. The system we took over from GFL just isn't allowing us the flexibility to achieve our business model in the way we expected so it's a little bit more of a delay there um but nothing was the first half of the year truck delivery was a was a significant issue the majority a good

portion of the trucks that are coming in the 55 that are coming in before the end of the year a good portion of those go to the mid-atlantic so that'll allow sean and his team to really go after

some of the synergies that we weren't able to capture understood and then i think you closed on 40 million annualized revenues incremental into a quarter can you just expand on the details of those transactions in terms of uh geographic and business mix any other details yeah we don't um

we don't typically give out the names but um we had one acquisition that was into our western region it's an existing market we'll be able to develop tuck-in synergies with that we'll ultimately be able to consolidate routes, good, solid acquisition. We had two other acquisitions in the Mid-Atlantic. One is a very direct overlay, which will have nice synergies over the next couple, next year plus. It's in Delaware to Southern PA. And then a second acquisition in PA that is going to bridge between two operations. It's right in between, has some overlay, but it expands. So it's all really nice fits.

And then last one for me, you know, thinking back to the second half of last year, I think you had some margin headwinds from insurance events, incentive comp, and lower landfill volumes were also a headwind. With landfill volumes having recovered now and lapping some of those headwinds from last year, is it fair to think margins could expand at or better than the sort of 50 basis points of underlying margin expansion trend? Or how should we think about the sequential margin expansion in the back half of the year?

Yeah, good question. I mean, certainly the, this is Brad, certainly the landfill business flipping from a headwind to a tailwind will be a nice driver of margin expansion year over year in the second half. I would say, though, that the margins implied by the fact that we raised our revenue guidance, we held our guidance range on adjusted EBITDA, that implies slightly softer margins than we had expected for the second half and that's really again the the not to keep harping on it but it's the mid-atlantic so i think what we're seeing is you know 50 60 basis point of kind of same store margin improvement um in the first half the legacy operations have exceeded that um and then the mid-atlantic was a bit of a drag um so i think the pace at which we can execute on the synergies get trucks delivered, et cetera, that's really going to tell the tale for the second half on margins. But you have those different factors that are going to be impacting it.

Great. Thanks so much. Thank you. Our next question comes from Trevor Romeo with William Blair. Your line is open.

Hey, good morning, guys. Thanks for taking the questions. I was just hoping you could maybe speak Good morning. Hoping you could speak to the volume performance in the quarter and the outlook. I think, Brad, you mentioned, you know, indications of stable economy in your markets and clearly some good trends in the landfill. You've also got some of the, you know, the Brookhaven factors and your own internalization initiatives, I guess. So, I'm hoping you can maybe just talk to, like, what you're seeing in the cyclical areas of volume and help us parse out the underlying trends in your markets versus the more Casella-specific trends.

Sure. Hey, Trevor. So, if you recall, in the first quarter, we talked in particular about a really soft environment for roll-off. and at the time we weren't really sure was that weather, and it was a difficult weather quarter in the northeast, was it weather or was there some underlying economic weakness at play as well? That business has recovered nicely. I don't think we're seeing a booming economy by any respect, but things have stabilized. And so the year-over-year numbers from a volume perspective really across the board are stronger in the second quarter than they were in the first quarter. Ned mentioned something in his prepared remarks that I don't want to necessarily let it go. I noticed our volume overall across solid waste and resource solutions was actually positive year over year. We tend to break up how we talk about volume between those two business lines, But overall, including recyclables, including our national accounts business, our collection business, and of course landfills, it's actually a pretty good volume story.

Yeah, and it doesn't get reflected in our bond staff, Brad, but it is important to note that a good degree of the volume increase of the landfills was internalized bond. That really reflects, one, getting synergies derived from acquisitions that we've done over the last two years as we roll off contracts and also just put new transportation lanes in place and ensure that transfer stations are getting to our landfills to create that value. So, you know, another strong quarter there by our team. Okay. Thank you both. That's really helpful there. And then, you know, sorry, just wanted

to go back one more time to, I guess, the Mid-Atlantic. I think you talked about the systems and the fleet, I think, in detail already. But I think one comment I caught from Ned was labor running much hotter. And if I look at your expense details, and I think direct labor costs were up like 170 basis points year over year as a percentage of revenue. So maybe just a little more detail on what's going in there. Is it primarily just not having the automated trucks

yet or something else going on with labor there? Yeah. So we've mentioned this a few times And where the labor cost is a percentage of revenue or net revenue in the mid-Atlantic is much higher than our legacy hauling businesses in the Northeast. And that's because there's a lack of automation, a lack of optimization of routes. And it won't get all thoughtlessly as we look to automate certain municipal contracts. But right now, we have a much higher, which is a great opportunity. As we've mentioned a few times, we thought we were going to yield that opportunity a little bit faster.

More broadly across, we're in cost inflation with our pricing program. But labor has been one of the higher running line items.

All right. Thank you all.

Our next question comes from Jim Shum with TD Cowan. Your line is open.

Hey, good morning. Thanks, guys. um so yeah just on the um collection pricing um looks like a fairly significant dip in the second quarter sequentially you went from 5.8 percent and q1 to 4.9 percent which you know seems pretty unusual quarter to quarter sequentially there what what's driving that

So part of the issue is mix. So across the lines of business, front end commercial has been our strongest line of business from a pricing standpoint. Roll off has been the relative weakest, and of course, in the first quarter, there's much less roll off activity than there is in the second quarter. So the best I could explain it is it's sort of a re-weighting of the business line rather than a same-store decline in pricing trends.

Yeah, and we also had a great bump. Our pricing was a bit weaker in the roll-off, and as we exited the spring, and vines were a bit weaker than we expected. We didn't test market out last year. It really isn't.

Okay, great. Thanks. And then what's the longer-term outlook for resource solutions? I mean, can this grow as quickly as solid waste, or does it become proportionally smaller over time?

I think that the evolution of resource solutions in terms of providing the services that our customers are looking for, whether it's colleges and universities, municipalities, industrial customers, I think that the resource solutions part of the business or materials management, as we call it, is going to continue to grow at a fairly rapid pace. We have tremendous opportunity in the Mid-Atlantic, as an example. We're just beginning to scratch the surface. We put the sales team in place, obviously. We're beginning to work that at this point in time. But when you think about Mid-Atlantic as an example, from a resource solution standpoint, we've got tremendous opportunities from an industrial standpoint to really add a lot of value to the business on a go-forward. So I think that we're going to continue to see resource solutions grow at a fairly rapid pace.

Okay. Got it. Thanks. And if I could just squeeze one more, and if you don't mind. Thank you. CapEx as a percent of sales has sort of been running 12% to 13% over the past few years. It seems kind of high relative to maybe your landfill composition to me. So how do you see that evolving over time? What's the right sort of capital intensity? Where do we land in, you know, I don't know, three, four years?

Yeah, it's, Jim, it's going to go up and down, of course, as you know, based on, you know, our schedule for landfill cell development. You know, the collection business, just trucks and containers, that tends to be 6% to 7% of revenue. So, you know, landfill could bring that number up significantly depending on how busy the construction schedule is for a particular year. I'd also point out, you know, kind of a unique factor given the relative significance of our acquisition activity is that, you know, when we acquire businesses we tend to not in all cases but but generally we tend to have pretty significant upfront capex as we try and in one shot bring their asset base up to our standards in terms of the fleet in terms of the facilities so certainly that um is a uh is a factor as well and and one that you know again for us given the relative importance of acquisition activity, you know, it's probably a bit different from our competitors.

Understood. Great. Thanks for the answers, guys. Appreciate it.

Thank you. As a reminder, to ask a question, please press star 11 on your telephone. Again, that is star 11 to ask a question. Our next question comes from Stephanie Moore with Jeffries. Your line is open.

Hi. Good morning. Thank you.

Good morning.

I wanted to maybe touch on a bigger picture question here, and, you know, given the current administration does appear to be a bit more amenable to larger scale M&A, if that changes your acquisition strategy at all, or if there's anything you can call out from a pipeline standpoint.

Yeah, I don't think that it really changes our strategy at all, Stephanie. I think that we've indicated that, you know, we see great opportunity on the eastern seaboard. You know, there are some larger companies there, but we're still focused on, you know, solidifying the investment that we have in the Northeast, solidifying the investment that we've just made in the Mid-Atlantic in terms of taking advantage of those platforms, continuing to add tuck-ins to those platforms as well. And then, obviously, looking for additional platforms down the eastern seaboard. So, I don't think that it changes our strategy from a M&A standpoint at all.

Thank you. I appreciate it.

I think it's certainly beneficial in terms of the tax depreciation, et cetera. It's very positive in terms of how we look at that with regard to the M&A activity on a go-forward basis from a tax perspective. Very positive.

Excellent. And then I was hoping if maybe you could give us a bit more of an update on McKean. I know you called out some good investments and opportunities there. But as we think about just the timing of maybe some of those investments starting to come to fruition here and, you know, any potential impact we can expect to see over the course of the next, you know, 24 months or so. Thank you.

So McKean first became operational late last spring, and we started off very slowly. And we started to ramp the site more this spring, but to date, we're only taking containerized MSWs. So like in 12 high boxes, we offload, gantry train, run them up to the face of the landfill. Our permit at the site stipulates that we're going to offload any gondolas, so loose MSW, loose C&D, or contaminated soils. We need to do so inside a building. So we've always had plans to add a transfer station, transfer building at the site. We had all the rail track outlaid to do that, and we're starting to build that building now. We completed into the first quarter, and that will allow us actually to complete some vertical integration. Initially, with one of our transfer stations, we'll look to move there, but it also opens up some additional streams of waste from third parties that we may consider. As we've said for a long time, we've never opened McKean to just become a big third-party commercial site. It's really a lot of it is defense for the Northeast for the next five disposal capacity. But we want to make money at the site. We want to have great returns. So getting this building completed, ramping up volumes a bit more, all part of that strategy. So we expect McKean to be a positive volume contributor through...

Fair to say that meanwhile, the team has really done a great job of getting up to speed operationally they're moving the containers they're really really getting the experience and the operating about that it's going to be a positive in 2026

and just as a footnote to what what Ned mentioned about the investment to bring on the capability to accept gondola waste you'll notice in the in the reconciliation of our guidance numbers in the press release this quarter we have a line for McKean. Of course, last year hadn't really factored into our forecasting for this year until we decided to add this capability. So that's why there's that additional number in the reconciliation to pre-cash flow. Understood. Thank you. You're welcome.

Thank you. I'm showing no further questions at this time. I would now like to turn it back to John Cassella for closing remarks.

Thanks, everyone, for joining us this morning, and look forward to all of you joining us for a third quarter call in October. Thanks, everybody, and have a great day.

This concludes today's conference call. Thank you for participating. You may now disconnect.