Good day and thank you for standing by. Welcome to the Costello Wave System Inc. Fourth Quarter 2025 conference call. At this time, all participants are 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 101 on your telephone. You will then hear an automated message when your hand is raised. To withdraw your questions, please press star 101 again. Please be advised that today's conference is pre-recorded. I want to hand the conference over to your first speaker today brian butler vice president of investor relations please go ahead

thank you marvin good morning and thank you for joining us on the call today we'll be discussing our fourth quarter and full year 2025 results which were released yesterday afternoon this morning i'm joined with ned coletta president and chief executive officer of casellaway systems brad helgeson our chief financial officer and sean steves our senior vice president and chief operating officer. 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 on our most recent 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 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, February 20th, 2020-26. Also, during this call, we'll 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 that they are available without unreasonable effort are included in our press release filed on Form 8K with the SEC. And with that, I'll now turn it over to Ned Coletta

to begin our discussion. Thanks, Brian. Good morning from Rutland, Vermont. As my first earnings call as CEO, I want to begin by saying how honored I am to lead this exceptional team into the next chapter of Casella's growth. I'm energized by the opportunities ahead and confident in our ability to continue building long-term value for our shareholders, customers, and employees. We close the fourth quarter with performance that reflects sustained organic growth, meaningful operating improvement, and continued strategic momentum across the business. For the full year 2025, revenues increased 18 percent, adjusted EBITDA increased 17 percent, and adjusted free cash flow increased 14 percent this marks our fifth consecutive year of double digit growth across each of these three metrics a testament to the durability of our business model and the strength of our strategic plan importantly adjusted eva da margins excluding acquisitions expanded 55 basis points year over year margin improvement was driven by discipline collection pricing, higher landfill volumes, operational efficiencies, and synergy realization from prior acquisitions. We completed nine acquisitions in 2025, representing over $115 million in annualized revenues. We started 2026 strong, and on January 1st, we closed the Mountain State Waste acquisition, which adds approximately another $30 million in annualized revenues and expands our mid-Atlantic segment into the West Virginia market. Our balance sheet remains a strategic advantage for us. We finished the year at 2.3 times levered with over $700 million in liquidity to fund future growth. Our acquisition pipeline remains robust with opportunities to further densify within our existing footprint and growth options to selectively expand into geographically adjacent markets that align with our strategic plan. Now looking at our 2025 segment performance, in our solid waste collection disposal operations, revenues increased 20.3%, driven by disciplined organic growth and another strong year of acquisitions. Base collection and disposal margins, excluding acquisition impacts, increased 170 basis points year-over-year as we generated a positive price-to-cost spread, continued acquisition integration efforts, drove higher landfill volumes, mainly through internalization, and generated cost savings through the half of 2025 vehicle delivery. Our team did a great job in the second half of 2025, advancing the key acquisition integration and system conversion initiatives in our mid-Atlantic region. We have substantially completed the migration of customers from acquired billing systems to the integrated Casella Lead to Cash system, and we expect the remaining migration work to be completed by the end of the first quarter or very early in the second quarter. Once completed, we can start the real exciting work of rolling out additional automated trucks, consolidating routes, and optimizing pricing and profitability. We continue to make permitting progress on our expansion efforts at our Hakes and Highland Landfills in New York. With the Hakes permit expected in the next couple of quarters and the Highland permit expected within the year. We are working to more than double the annual permit at Highland from 460,000 tons a year to a million tons. And we would also add close to 60 years of capacity at current run rates. At the Hakes C&D landfill, we're permitting a 10 plus year expansion. These expansions are important with the expected closures in New York over the next several years, including the expected closure of the Ontario County landfill at the end of 2028. The McKean Landfill Rail Upgrade Project remains on track for completion in the second quarter of 2026. This will allow us to offload municipal-falled waste, contaminated soils, and C&D materials from gondolas. Our resource solution segment also delivers a strong year, with revenues up 9.1% and segments adjusted EBITDA up 9.6%. This reflects strong national accounts performance and operational efficiencies from the upgraded Willimantic recycling facility. While current recycled commodity prices are trading at roughly 20% below 10-year averages, our effective risk management programs pass much of this commodity volatility back to our customers through the floating processing and SRA fees. These tried and true programs are effectively offsetting about 80 percent of all commodity downside risk helping us to generate consistent returns on our recycling business pivoting to 2026 we exited the year with strong momentum and a solid setup for this year our frontline team has done an amazing job this winter providing solid customer service through one of the coldest and snowiest winters we've experienced in over a decade Despite these operational headwinds from the bad winter weather, we remain very confident in our outlook, driven by sustained pricing strength, continued self-help cost initiatives, automation benefits, and a very attractive acquisition pipeline of over $500 million of annualized revenues. We're focused on both densification and strategic expansion opportunities. Our team is laser focused on improving safety and employee engagement in 2026. We've added several key new safety and HR leaders to the organization. We're focused on process improvement and we're investing in key systems such as AI enabled onboard truck technology. With that, I'll turn it over to Brad to provide additional details on the fourth quarter performance and financial results.

Thanks, Nick. Good morning, everyone. Revenues in the fourth quarter were $469.1 million, up $41.6 million, or 9.7% year-over-year, with $23.1 million from acquisitions, including rollover, and $18.5 million from same-store growth, or 4.3%. Solid waste revenues were up 9.9% year-over-year, with price up 4.4% and volume down 1.1%. Within solid waste, price in the collection line of business was up 4.6% in the quarter, led by 5.3% price in front-load commercial, and volume was down slightly at 0.3%, with modestly positive volume in front-load and residential, but weakness in roll-off down 5.2%. Price in the disposal line of business was up 4.1%, and third-party volume down 4.5% year-over-year. However, this stated volume decline is misleading for a couple of reasons. First, results at the landfills were steady, with same store price up 2.5% and total tons up 1.7%, including nearly 10% growth in internalized volumes, while reported numbers only refer to third-party volumes. Second, the decline was also largely driven by the transfer station and transportation businesses with little net impacts to EBITDA the important the important point here is that the landfill business is healthy and we're confident heading into next year as I'll discuss in a few minutes resource solutions revenues were up 9.1 percent year over year with recycling and other processing revenue down 1.4 percent impacted by lower commodity prices and national accounts of fifteen point six percent within resource solutions processing operations our average recycled commodity revenue per ton was down 27 percent year-over-year with softer markets across the board and most commodities 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 commodity prices on our revenue with less than a million dollars processing volume in revenue terms was up 12% driven by higher volumes at the Willimantic recycling facility which was down for its upgrade in the fourth quarter last year within national accounts revenue price was up 3% and volume up 9% adjusted evita was a hundred and seven million dollars in the quarter up 12 million or twelve point seven percent year-over-year with three point three million dollars of contribution from acquisitions including rollover and nine percent organic growth adjusted EBITDA margin was twenty two point eight percent in the quarter up approximately sixty basis points year-over-year bridging the year over-year change in adjusted EBITDA margin new acquisitions contributing at lower initially the top margins in our overall business diluted margins by 40 basis points in the quarter the base business excluding new acquisitions completed in the past 12 months expanded margins on a same store basis by a hundred basis points driven by the collection business across our footprint including the mid-atlantic recall the private the privately held businesses that we acquire typically operate at lower margins which can create short-term margin dilution as we integrate these businesses capture synergies and apply our operating model they become margin extension opportunities over time creating a regenerative benefit as we continue to execute our acquisition strategy cost of operations were three hundred and thirteen point eight million dollars in the quarter up twenty seven point two million year-over-year with seventeen point four million dollars of the increase from acquisitions and nine point eight million dollars in the base business excluding acquisitions cost of operations were down 60 basis points as a percentage of revenue on a same store basis general and administrative costs were fifty five point nine million dollars in the quarter up three point seven million year-over-year as a percentage of revenue G&A was down 30 basis points year-over-year reflecting increased IT spend but also favorable incentive comp accrual adjustments from a gna standpoint 26 will be a pivotal year as we lay the groundwork with better systems and process for becoming more efficient in our back office and generating better scale as we continue to grow our goal is to begin to benefit even margins with lower gna's percentage of revenue in 2027 and for this to become a consistent and tailwind to margins for years beyond that. Depreciation and amortization costs were up $13.3 million year over year, with $4.2 million resulting from the recent acquisition activity, including the amortization of acquired intangibles. You'll note that we isolated a charge on our income statement and adjusted the Vidal Reconciliation this quarter for the accrual of closure costs at our Hawk Ridge Organics Facility in Maine. With the ban on land application of organics in Maine, it made economic sense for us to close this facility and redirect the material primarily to our landfills. We anticipate approximately $3 million of additional costs related to the closure of the site in 2026, which will not impact adjusted EBITDA. Adjustment of income was $18.9 million in a quarter or 30 cents per diluted share, down $3.4 million or 5 cents per share. Gap net income was down $7.4 million in the quarter. Net cash provided by operating activities was $329.8 million in 2025, up $48.4 million, or 17% year-over-year, largely driven by EBITDA growth. CSO was essentially flat from September and last year at 36 days. Adjusted free cash flow was $179.9 million in 2025, up 14% year-over-year. Capital expenditures were $245.1 million, up $41.8 million a year-over-year, including $66 million of upfront investment in recent acquisitions. As of December 31, we had $1.17 billion of debt and $124 million of cash. Our consolidated leverage ratio for purposes of our bank covenants was 2.34 times, and our $700 million revolver remained undrawn. Our liquidity and leverage profile will enable us to be opportunistic in continuing to execute on our growth strategy and robust acquisition pipeline. As laid out in our press release yesterday, we announced financial guidance for 2026. This guidance included revenue in the range of $1.97 to $1.99 billion, or 8% growth at the midpoint, adjusted EBITDA in the range of $455 to $465 million, or 9% growth at the midpoint, and adjusted free cash flow in the range of $195 to $205 million, or 11% growth at the midpoint. All of this is consistent with our preliminary outlook as communicated on our third quarter conference call in October. Our guidance ranges reflect acquisitions completed to date, including Mountain State Waste, which closed on January 1, and assume a stable economic environment for the balance of the year. While we expect to continue to be acquisitive this year, our guidance does not reflect any further acquisition activity. On the top line, our guidance includes approximately $60 million dollars from acquisitions or three percent growth which includes rollover and a mountain state waste and approximately four and a half percent organic growth at the midpoint in the solid waste business we're planning pricing of approximately five percent which we aim to cover and stay ahead of inflation as a reminder we retain pricing flexibility across approximately two-thirds of our collection revenue so we are well positioned to respond to changing conditions if necessary as the year progresses solid waste volumes are expected to be approximately flat plus or minus with continued churn in our collection book of business reflected in that estimate particularly as we integrate new acquisitions bridging 2025 adjust the EBITDA to our guidance ten to fifteen million dollars is from acquisitions and approximately 25 million or six percent is based business organic growth at the midpoint our Our Just Debitat guidance range implies approximately flat margins to 40 basis points of margin improvement in 2026, which is largely the base business. This improvement is expected to be driven by strong, consistent pricing, benefits from integration and synergy realization with our acquisitions in the mid-Atlantic region, ongoing operating improvements in our collection business, and higher overall landfill volumes year-over-year. These drivers are expected to be partially offset by the closure of our Hawk Ridge Organics facility and lower volumes at our North Country landfill in New Hampshire as we ramp down the volume ahead of anticipated closure at the end of next year. We expect adjusted free cash flow to grow at approximately 11% at the midpoint of guidance, driven by adjusted EBITDA growth and reflecting capital expenditures of approximately $260 million, which includes approximately $65 million of upfront spend in connection with recent acquisitions and a small remaining investment to complete rail access capability at the McKean landfill. With that, I'll turn it back over to Ned for some closing comments.

We're turning it over to the operator right now for questions. Thank you.

Thank you. At this time, we'll conduct the question and answer sessions. As a writer to ask a question, you will need to 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 I compile the Q&A roster. And our first question comes from the line of Tyler Brown of Raymond James. Your line is now open.

Hey, good morning, guys. Good morning, Tyler. Hey, Ned. Congrats on everything. But I want to kind of start just to ask you a really big picture question. So can you just help us shape a little bit about your vision for Casella, say, over the next five years? I mean, do you want to speed up, slow down M&A? Are you looking to do bigger deals, smaller deals? Are you really focused on self-help? I'm going to leave it pretty open-ended, but just what's your message to shareholders and employees about your vision for Casella?

Yeah, thanks, Tyler, for throwing a hardball for the first question. I appreciate that. Yeah. So, you know, not a lot changes in many ways. So, you know, John and I, as you know, have had an amazing partnership for many years and much of the strategy of the company we've shaped together with the senior team. So there's not a right turn coming and no one should expect that. We're focused on the same building blocks that have created a lot of value for shareholders over many years. You know, this year myself, I'm focused on a few different things, you know, making sure our workforce is safe and engaged and we're really continuing our investment in our safety staff our processes technology there we're also focused on upping our game from HR standpoint as we've grown dramatically making sure that our all of our employees really understand our culture what makes us special and why we're such a great company to work for and how to to support each other we're also focused on internal and communications and just making sure that we all know each other and we have great ways to communicate up and down the organization as we've grown and the last point kind of gets to what you're talking about for many years we've had excellent strategic plans as a company but just after we have alignment up and down our management team in those areas so you know as I started with no major right turn we're going to be focused on the same major building blocks, driving incremental value through our landfills, through additional permeated capacity and cost reductions, better utilization, additional profitability, our collection line of business, pricing, automation, optimization, driving value through our resource solutions business as we've done very, very well over time. And then the growth initiatives, both on acquisitions and development. and our pipeline is very, very good right now. The opportunities for 26, I think it will be a nice, solid year for us on the acquisition growth side. So, you know, overall, my company right now, we exited the year in a great spot and, you know, we're working very hard.

Excellent. That was fantastic. And then you gave some good color on the mid-Atlantic. It sounds like the new system is going to be fully rolled out by, call it Q2. It sounds like the new trucks are landing, but is it right that you're only baking in about $5 million of synergies into the guide?

Yeah, we have completed almost all of the systems integration work. There's a little bit left to be done. It'll be done kind of early here in the first quarter. No risk around it and gain some real efficiencies, but we're being a touch conservative for a few reasons. One, we've got to get this work that's running through our income statement. So, you know, there's more to come here. As we said, this is a multi-year opportunity and will be a positive tailwind.

So it's probably operational opportunity routing, et cetera. But then longer term, there's some opportunity to surgically price. Is that right? And any thoughts about what that could mean?

Yeah. I mean, certainly when we have all the businesses running on the same system, And we'll have a much better ability to assess customer profitability, route profitability, and price accordingly, as we do in the rest of the business. So that'll be a big opportunity going forward. I think it'll be a little premature for us to put a dollar number on that. But you can imagine what that opportunity could be. And then going forward, kind of beyond this initial wave of synergies, facility consolidations, long-term route consolidation opportunities, as we continue to fill in and densify in that market with tuck-ins. There's a long list of opportunities that will extend far beyond 2026.

Okay, so 27 sounds good on that front. But Brad, you also made an interesting comment about G&A leverage starting in 27. I mean, I know you guys run a couple hundred basis points higher than maybe peers, but can you talk about what are we talking about quantum-wise is from a G&A leverage perspective, 27, 28, 29. I mean, however you guys want to frame that. Thanks, guys.

Yeah, I mean, we run a little over 12%. You know, the industry benchmark with our admittedly much larger peers is closer to 10%. So that's the long-term goal. That's sort of our North Star. You know, I think the first step for us over the next, Call it three to five years. We'll be able to go from 12% down to below 11% and then keep the train rolling. We have a number of opportunities and projects that we have lined up in different areas this year to start to get some benefits in the numbers in 2027. As I said, 26 is sort of a pivotal year for laying a lot of the groundwork for what we're going to be able to realize going forward.

Okay, perfect. already looking forward to 27. Thanks, guys. Thanks, Tyler. Thank you. One moment for our next

question. Our next question comes from the line of Tammy Saccarillo of JPMorgan. Your line is now

open. Hi. Good morning. Thank you so much. I wanted to follow up on that volume comment you made. Just from a modeling perspective, could you provide some color on volume growth as we see

the four quarters this year. Yeah, I'll turn this over to Brad in a second, but I wanted to make, Brad mentioned this in his prepared comments, but I want to double down on it. You know, stats are as good as the stat is. So like if you look at our volume stat in the fourth quarter, especially on the landfills, it looks a little weak, but it only looks at third-party bonds. It doesn't look at overall volumes coming into our landfills. And as Brad said, we had very strong remixing at our landfills from third-party customers to intercompany customers. So our tons were actually up 1.7% while our volume stat was down. So, you know, that statistic doesn't tell the full story because it's just looking at third-party revenues. And if you look at that rolling into this year, Brad, and take that as a backdrop of we actually had a pretty good volume quarter in the fourth quarter. It might not have showed up in the stat on the third-party side.

Yeah, and looking ahead to 2026, we do expect landfill third-party volumes to be a positive for growth. So, you know, I think what you saw here this year was a little bit of a blip as we shifted, really to emphasize more internalization where we could. On the collection side, just to give kind of a full volume picture. We're looking at flat growth-ish. We're hoping to bend the curve and start to grow the business organically via volume. As we've acquired so heavily in the last few years, there's been a churn that's been ongoing, and volume on the collection side has been a net negative, like everybody else, as we've prioritized price and making sure we have appropriate margins and returns from our customers. We think we have an ability to grow this business in our markets, particularly in the Atlantic, as we get our feet under us there going forward.

Understood. That's very helpful. And one more question, follow-up question on the GNA comment you made. I think you said this year is a pivotal year that would pave the way for multi-year cost improvements. The goal is to get to the industry average 10 percentage. Is there a way to frame how you get there? Do we see some accelerated basis points improvement next couple of years, and then it sort of eases into a 10% range? Any way to sort of frame the opportunity here?

Let me maybe frame it at sort of a high level. You know, our back office processes at Casella are very, very manual intensive and don't offer us much scale as we continue to grow. So we grow the business, we have to add more people. You know, as we improve the technology, utilization technology and the tools available to the team, consolidating our building system, which we've talked about a lot, we're putting in a new maintenance system as we speak. We're getting, ramping up the utilization of our procurement system so there are many things kind of below the surface that we're working on that will you know when we come out of 2026 it's not going to be magically you know on January 1st 20 27 but the process we're going through is to end up where we're much more scalable and we can really grow or rather shrink that percentage of revenue

as we grow. And it's even a little more pointed than that, where, you know, many of these programs started, you know, in early 25, and both in 25 and 26, we've had doubled up costs, because in some certain cases, we're running multiple systems at the same time. We have additional staffing during these transitions. So there's definitely not just the efficiencies that Brad's talking about, but There are just some redundant costs in the business right now as we're making this technology transformation. But like many things, very well thought out. There are areas of large technology risk, as we've talked about before, which is upgrading tried-and-true systems we've had before and improving integrations and really gaining efficiency.

Understood. Thank you.

Thank you. One moment for our next question. Our next question comes from the line of Adam Bubles. of Goldman Sachs, your line is now open.

Hi, good morning. You talked about the volume performance, including some more internalization rather than taking in the third-party tons. I think I understand the benefits of internalization all else equal, but can you just talk about the decision to make that tradeoff, the economics for substituting external volumes for internal volumes, And then longer term, how do you balance the opportunity drive internalization with the need for backup capacity in the Northeast?

Yeah, over the last couple of years, we're running a little bit short on landfill vines at some of our key sites, especially through New York State. Typically, you want to run a landfill, say, 85 to 95 percent full in a year. And we're a bit short to that. In 2025, a lot of our effort shifted to getting the transportation lanes in place, equipment in place, integrating acquisitions, getting those tons into our landfill sites. And as we exit 2025, we've got a lot of that work done. And it was exciting because it gives more stability to the business. If we can control more of the tons through vertical integration, it creates more stable, lasting value over time. But we also were filling up our site. So as we were making some of those moves, we had to exit some third-party tons from our landfills, hence a little bit of that negative third-party stat. But overall, we had more tons coming into our landfill sites and a really nice mix improvement as well. So that's something we're in a pretty good spot right now. 26 will not see a shift like that where we're remixing again. will be focused very much on quality of revenue at the landfills and driving higher returns and

moving up the average price point. Great. And then I know it's still early, but I'm hoping to get your initial thoughts on where the internal and external tons at your Ontario landfill could head post-2028 and any cost implications that we should keep in mind during that process?

yeah so this is something we're still mapping out and we'll get more information to shareholders but this has been a known closure point for us for a couple years so we've been building up to this what we feel good about our balance sheet accruals and the glide rate getting to that end point we don't expect you know charges or something like that we expect all these costs to be accrued for appropriately leading up to that closure the site's taking in about 850,000 tons a year of waste as we currently speak. As we've been talking about for several quarters, we've been actively working on expansion at our Highland landfill in New York for close to five years, if you can believe that. We're very close to the end of that process and we'll be going from 460,000 tons to a million tons a year. Quite a few of those tons from Ontario will move over to Highland. And the highest quality revenue times will move over. We've also been in early stages of some other expansion work that could help with some of those additional times in the market where we may shed some of those times as well. But as we're mapping this through, we'd like to be in a situation where our quality of revenue improves, our returns improve, and we don't see any sort of major step down from the EBITDA.

And that's just that Ontario, but it's also a very, very expensive and from an EBIT and net income perspective. So, you know, as we re-blend that over time, move some volume to Highland, move it to some other place, and then coming through that, we may end up with a, or not may, we expect to end up with a much better cash flow and earnings profile from those times.

Great. Thanks so much.

Thank you.

Thank you. one moment for our next question. Our next question comes from the line of Trevor Romero of William Blair. Your live now open. Hey, good morning, guys. Thanks so much for

taking the questions. A couple for me here. I guess the first one is on M&A and your outlook here. I think if you look back at the last few years, you've kind of added double-digit percentages to revenue from M&A. I think you're coming into this year with maybe a little bit less than the past few years. So just in terms of what's in your pipeline now, you know, are there any bigger deals out there? Do you see opportunity to get toward those kind of double digit M&A contributions this year? Or do you think it'd be more likely it'd be a little bit less than

the elevated levels the past few years where you stand today? Yeah, great question. We have had several very strong years. 2023, 2024, we're above average years. We're well above $300 million of required revenues in 2023, 2024, around $250 million of required revenues. And this last year, around 115-ish or so, Mountain State Ways, we thought, was going to land in December and end up landing in January. So that would have brought us a little closer to 150. But where we sit today, our pipeline is really good in the advanced stage. We've got a number of high-quality companies we've been working with for a period of time, several of which are a little bit larger, and we would hope to kind of crest that 150 level, 150 million of revenues in 2026, and hopefully, you know, maybe get above 200 million if the pipeline continues to develop. But from our vantage point, it comes down to quality and strategic fit. You never talk about the deals you don't land, and there are several of those in 2025 that did a lot of work on and they just didn't work out for either you know compliance reasons or pricing or whatever it might be and you know as a management team John and I said this for a lot of years you know we're not just buying companies to buy them we're buying them to make money and to make returns and advance our business model and we stay true to that so from you know having the discipline to be able to walk away it's something we've always maintain and that's why we don't guide acquisitions you know you don't want to get in that position where you feel like you have to do something that's not the right value adder so from our vantage point we're seeing a really good spot right now with our team our acquisition team the broader management team has been working hard John Casella and head of chairman is spending a lot of time working on sourcing acquisitions and continuing to build the pipeline which amazing for our to do that and just Trevor from modeling perspective in your

question you know a light rollover number coming into this year because number one at 115 plus or minus of the annualized revenue acquired last year is a relatively light year for us compared to you know what's kind of become our run rate but also it was front-end loaded so we actually saw most of that that acquisition revenue in 2025 so very little about 30 million dollars rolling

over into 2026 yep all right thanks guys appreciate that it's good to hear that still I'm good to hear that John still active in the market for sure then real quick just kind of had a question on on the guide I think Brad you mentioned, the Hawk Ridge facility closure, some of those tons being redirected to your landfill. Does that kind of capture all the economics, or are you expecting kind of a downward impact there on the, you know, and the North Country Grants that you mentioned, too, you can just help us out in that impact factor there?

Yeah, you're breaking up a little bit, so let me know if I missed something here. But, you know, the Hawk Ridge, it was a relatively small facility, so we'll see some headwind from that in 2026, and that's baked into our guidance. But, you know, net of moving some of those materials to our landfills, I would say it won't be significant. North Country, from a margin and dollar standpoint, will be more significant. That probably represents a headwind of 20 basis points to our EBITDA margin, you know, as we ramp down that volume planning for the end of that facility's life in 2027. Okay.

Thank you, Brad. I think you got the question.

Thank you.

Okay.

Thanks. Thank you. One moment for our next question. Our next question comes from the line with Jim Shmum of TD Callen. Your line is now open.

Hey, good morning, guys. Good morning. Good morning. I just wanted to make sure I have the mid-Atlantic story down correctly. So it sounded like Ned said in the prepared remarks that you have a $5 million benefit for the new automated trucks in 2026. And so I'm assuming, or maybe this is incorrect, but is that $5 million benefit that's from, like, a labor reduction of, you know, removing bodies off the back of the trucks? You're not assuming any, like, operational benefit from routes and stuff, right? So you get, you've got 5 million that you know about and that you complete your migration in the next, you know, coming days, and then that gives you the opportunity to sort of look at and see what sort of size what the next opportunity is, which you have not baked in any of that into your 2026 guidance. Is that correct?

So I'd describe it a little bit differently, and Sean Steeves is sitting here so he can keep me honest, but there's a couple components. One is, as you said, getting the automated side load trucks on the street, replacing rear load trucks, and the immediate productivity and labor savings that come from that. But it's also combining routes. So once we can combine systems, we can eliminate routes for businesses that are operating today in the same market overlapping each other. So the way I think I described it last quarter was, you know, the $5 million includes that initial list of as soon as we flip the switch on the system, we're going to go after, you know, these routes in this market and this number of routes in that market. that's just the tip of the iceberg I think is the point we're trying to make over time as we'll be able to get more routing opportunities facility consolidations and of course it's regenerative as we continue to acquire

in the in the market and just hitting that one step further right almost all of the G&A of back-office savings are eaten up in the year by redundant systems, by the investment we're making. So the savings are coming, but in the year, we've got that doubled up cost as we're doing this work in the marketplace. So then that's why it starts to show up more in late 26 into 27. Okay. Because my understanding was you've got

these two systems. And I think you guys said in the past that you could be running like two trucks basically in the same neighborhood, but you're not really sure because you don't have the visibility on it because you're on two different systems. So if that's the case, then operationally you wouldn't be able to remove, necessarily remove those duplicate or redundant routes yet.

Am I not thinking about that the right way? You're close. So as we've acquired businesses, we left many of them in the mid-Atlantic on their own. We come from customers through some billing and collecting. They're on different systems. You couldn't start to collect one or two more steps that need to be made in the first quarter. And then that allows us to have all those customers in the same database. We start to reestablish routes, optimize, consolidate trucks. At the same time, automated trucks are arriving, which allow us to gain more efficiencies. So all of that works together to the $5 million number. It will be bigger over time as we get rid of those redundant G&A costs are in the year, and we also get the next legs of this strategy.

Okay, thanks. And I would assume that given the work that you had in the redundant systems that from an M&A standpoint in the mid-Atlantic, I would have thought that perhaps you slowed down the M&A in the mid-Atlantic just because you kind of had your hands full. Is that fair? Do you now ramp up M&A when you have these sort of systems sorted out? Is that fair?

Yeah, we hit the brakes a touch that that is fair. We've done another 10 acquisitions in the Mid-Atlantic since we brought on the GFL platform two years ago. So we have continued to build density. We've got a great slide in our investor deck that shows those additional acquisitions we've done over the last two years in the market. But you're right. The gold standard is we acquire a business either within the first month or the first two months. It comes onto our integrated systems. We start to collapse routes. We get costs out, and we generate synergies faster. We were not in that mode the last two years. And so we've got some built-up, you know, opportunity now. For a little bit, it was an overhang. Now it's a great opportunity. We still have that work to be done, and we'll gain those synergies. And as you said, as new acquisitions come in, they'll come on to the modern Casella system within the first couple months, and we'll be able to drive synergy value faster.

Okay, great. Thanks for the answers, guys. Appreciate it.

Thank you.

Thank you. one moment for our next question. Our next question comes from the line of Stephanie Moore of Jefferies. Your line is now open. Great. Good morning. Thanks. Hi, everybody.

Good morning. I wanted to circle back on the mid-Atlantic opportunity, particularly as it relates to pricing. You touched on this a little bit earlier with the question, but I wanted to get a sense of how you view the overall pricing opportunity in the mid-Atlantic. I think there's a couple of dynamics, a couple, I guess, aspects to it. So there's, you know, certainly having the systems in place, which you noted, allowing for dynamic pricing, but also can you talk a little bit about maybe how the pricing in that region compares to other regions? And then also talk about timing. You know, is this something that, you know, you have to effectively do at the start of the year? Can you make these changes, you know, maybe as 2026 progresses, or is this more of a 2027 opportunity. Just kind of wanted to drill down on that opportunity a little bit more.

Thanks. Yeah, maybe I'll start off filling in some of the numbers and then hand it to Ned to talk about the strategy going forward. But we overall pricing across lines of business, we were about 3% in the mid-Atlantic this year. So we've got some pricing, of course, but We weren't in a position to price as aggressively, for lack of a better word, where it's warranted because we couldn't really figure out exactly where it was warranted. So if you just do that math, 3% versus the rest of our business, which is north of five, blending down to the high fours in the fourth quarter, you can kind of pencil out the theoretical opportunity, How that plays out, of course, will depend on some factors in the market and what we find out. Timing-wise, I think that work will really begin, call it mid-year, after we're done with the integrations onto the one system and can really dig into the pricing analytics. But beyond that, as I think I mentioned earlier, It's certainly premature to put a dollar number on it, but Ned, any thoughts?

Yeah, this is one of the main reasons why it's important to be on our system besides the routing. We've got great tools we've developed over the years to understand customer-by-customer profitability and returns. And we want to make sure if we're going to put assets to work, either part of the capacity of a truck or dumpsters or whatever it may be, that we're making an adequate return for that work. And as the Mid-Atlantic business is built and until all of these customers are on to the integrated Casella systems, we have not had a perfect view of profitability returns of those customers, as we said. So we've been doing some work, of course, to understand where we need to drive price and why and how to stay in front of inflation. but it's not done to the same rigor that we've been doing historically across our book of business in ensuring we have the right quality of revenue. So all of those great practices and how we run our business day-to-day and how we generate solid margins and returns throughout our collection line of business, all those tools will be brought to bear in that marketplace this year into the future. And let's face it, it's about a 20% EBITDA margin business today. And generally, our hauling businesses as a company are north of 30%. So, you know, there's a lot of opportunity there. I don't think we can say we map it out exactly this much per year, but we know that opportunity is there to improve quality of revenue, to improve efficiency on the street, to have integrations of routes. There's a lot there. And now let's go get it done.

No, definitely understood. Well, I'll leave it at that. Thank you, guys.

Thank you.

Thank you. One moment for our next question. Our next question comes from the line of Slomo Rosenbaum of Steve Sill. Your line is now open.

Hi. Good morning. Thank you for taking my questions. Could you, just to start, can you talk a little bit? You've had really good national accounts revenue growth over the last couple of quarters. Can you talk a little bit more about that and what might be driving that?

Yeah. It comes from a couple of different buckets. it really has been a strong point for us and there's several different you know avenues that we're growing that business one is more just traditional multi-site retail maybe broker work and that's a little bit less exciting we definitely look for quality of revenue and we look for opportunities to have overlaps to our hauling businesses where that might be the channel of growth into our integrated collection business. But probably the more exciting part is our industrial business. The higher margin, we're delivering differentiated services, and we've been growing very, very fast into that segment. So both of them are areas of growth, but I think from our vantage point, if we can get the vertical integration and the revenues are recognized through the National Accounts Group into our integrated hauling landfill business, That's amazing. We try to under-index just pure brokered work that we're not servicing. And then that industrial service work, that's where, you know, our sales efforts, our ability to drive value from an operating standpoint, that that's where we really shine. And, you know, we've had many years in a row of 10-plus percent growth, and we continue to drive a lot of value for our customers and our shareholders in that segment.

One comment about it is, you know, people who are new to Casella sometimes ask, you know, why comparing our margins to some of our larger competitors? Why is there a differential? This is part of the answer. Our national accounts business, which is a nice growth engine, which is, you know, obviously little to no capital investment, so a great returning business, it does have a lower EBITDA margin for a while because it's functionally a brokerage business. so that's a factor where you know we make a decision to okay just probably is downward pressure on our margins on a comparative basis but but it's a great business and it fits within our broader business as Ned described yeah I just

read some numbers our industrial business grew about 17% in the year so this is more value-added services higher margin so that's the larger growth engine in national accounts and where we've been driving more sales and operating focus.

Okay, great. Thanks for the color. And then is there a way to dimensionalize the impact of weather in the first quarter? Because, you know, there's obviously been a significant impact and you guys are more concentrated in where we have had more of the kind of

simpler weather. Yeah, it's funny. You know, we learned a long time ago, try not to make a lot of excuses about the weather. Let's face it, the men and women who work for Casella, they're out there in the cold, the rain, the snow, the ice every day taking care of our customers and working very, very hard. However, we did take a look because we've been living this for the last couple months and it has been cold, it has been snowy and Brian Butler ran some stats for us and the snowfall across our markets is up 10% versus 10-year averages, but the temperatures are 20% below 10-year averages. And it has been cold. Our team has just done such an amazing job. I mean, being out there 4 o'clock in the morning servicing stops with negative 20-degree temperatures is not easy on our people. It's not easy on productivity. It's not easy on equipment. It's just been, from a safety standpoint, our safety stats are some of the best we've had in a decade. And the team is just doing such a great job there, buckling down paying attention, really being focused, being deliberative in their work, and trying not to have injuries or accidents. So hats off to the entire team because you're right. This has not been an easy start to the year. But as we sit around, look at our numbers, look at our stats, look at our productivity of business, we're doing pretty good given this backdrop. And it didn't cause us to change our view on the year and and we're you know probably a touch behind in january where we want to be but given those um challenges you know you look at it you get a big um and then the productivity is a bit tougher as well so you know it has been a bit of a headwind but you know we're from vermont we're used to it and you know we've brought a lot of safety practices across you know, our new markets. And we're trying to make sure, you know, as we operate in the snow and ice and other markets, we do the same things we've done well for 50 years.

Okay. Thank you for that clarity. Then I just want to make sure I understand your commentary on the Ontario closure. Are you communicating that because of the actions you're taking, you don't expect to have an EBITDA impact going from 28 to 29, like you might see a revenue impact, but given the mix of what you're doing, you're trying to kind of structure it so that you won't

have an EBITDA impact. Am I understanding that right? Sort of. So as Ned mentioned, we're developing a plan to try and smooth it to the extent that we can in a way that makes sense operationally and with our reported financial results. I would say, though, that it is much less an EBITDA issue as it is a landfill amortization EBIT and cash flow issue on those lines on that basis Ontario is extremely expensive to run much more expensive than any of our other sites so so what you may have is if you think about steady revenue or steady EBITDA or maybe up maybe down We'll figure that out, but the underlying earnings and cash flow of that EBITDA will be much, much better.

Okay, and then finally, is there any update on what's going on with New Hampshire's amended House Bill 707? Has anything changed over the last couple months on that?

Yeah, New Hampshire is a very complex situation for us today. As you know, we've been working for several years now to develop the new Granite State Landfill in Dalton, our efforts are are strong there we continue to fight on two fronts from a legal standpoint challenges where a permit was denied for dormancy and we filed appeals for that where we don't think that's accurate and we'll continue to fight we think there's a lot of value to be created at the granted state landfill and we feel like our legal standing is strong and we'll continue to work to move that permit forward. One of the areas that John Casella's been heading up for a few years and continues to make a lot of progress is on 707, as you mentioned, and really looking at getting local control amended where we can advance permitting at our existing North Country landfill. There was a settlement agreement years ago, which does not allow us to expand the landfill beyond its current footprint. However, we own many acres around this landfill. We could have a very efficient, capital-efficient, good expansion into those areas, and it would make a ton of sense for us, our shareholders, the citizens of New Hampshire, to develop that capacity over time. would be much needed for New Hampshire and let's face it the Northeast over the next 20 years to expand that site so you know it's one of quirks where there's a little bit too much local politics around expanding good quality existing sites and that's the work we've been doing with the legislature and frankly you know the good senators and representatives of New Hampshire have been working to fix, because they look at a site like North Country and they say, you know, this is something that we should have the X for ASTI like that and really think where we sit today. As I said earlier, something John's passion project is his, and it's another area he's continuing to help the team in looking to advance that. Not a lot more to say right now other than we're excited, and it allows us to create additional airspace at North Country. If it doesn't, as I said earlier, we continue to push hard on the Granite State site, and we're also developing some transfer capacity at the state. We're working on a rail transfer station. We're looking at other ways to move waste around the state of New Hampshire to meet the ongoing needs of our customers over time. But it's a complex situation, and something we're very much focused on, having a good outcome for shareholders.

Thank you. Thank you. One moment for our next question. Again, as a reminder to ask a question, you'll need to press star one one on your telephone. And our next question comes in line of Bill Griffin of Barclays. Your line is now open.

Thanks very much for the time. I just wanted to come back first to some of the comments you made on sort of your M&A And I think you mentioned, you know, there could be a couple larger opportunities coming about. Are those opportunities that have come about as a result of your sort of expanded mid-Atlantic footprint, or are these kind of within the Northeast? And then along those lines, you know, how do you think about your ability to internalize tons as you continue to grow and acquire in the mid-Atlantic region?

Thanks, Will. So it's a little early to get into the details on a few of these opportunities we're looking at, you know, until they mature a bit more. But we're working both in, you know, the legacy markets in the Northeast and down into Mid-Atlantic as well. And, you know, we really like opportunities that are $50 million of revenues or $100 million of revenues. We find them to be great complements to our existing business and, you know, right size to integrate effectively. And we're hopeful to convert a few deals in that size this year. um so it's a little hard to get ahead but you know hopefully it's some more exciting information here as we step into the year on yeah understood appreciate that and then um just follow up on

landfill pricing i think you mentioned same store price was up around two and a half percent and i think last quarter if i remember it was you know around three that i guess in my sort of mental framework that that feels light just given you know some of the capacity constraints we continue to talk about in the Northeast. Could you talk about maybe some of the underpinnings of that, you know, kind of two and a half, three percent, same story, landfill price, and maybe just looking out, you know, several years, how do you think that could trend? Yeah, we've come off

an interesting period in the Northeast. I mean, while in the long term, the market is supply constrained and will continue to see sites closing, over the last couple of years, we've seen a few new rail moves open up out of the Northeast, out of the broader New York, New Jersey markets, which have moved some tons around in the marketplace. We have not directly lost customers, but there have been some decent amount of volumes that have flowed out of the Northeast, which has put a little bit of a lid on pricing over the last two years. As I said earlier in my commentary, we're running pretty much full right now, or as full as we want to be. So we're back to the point for the first time, I think, in two years where quality of revenue driving returns is a big, big focus of our team. We're running fuller because we've done a great job getting internalization to our landfills, getting those transportation lanes opened up. But now it's time, as you said, to start to advance pricing again and focus on quality of revenue. And you know, everyone's looking out 10 years and saying, where is this market going to be? And You can't just build a transfer station or advance the strategy in 12 months' time. These take a long time. So as some of these new opportunities opened up over the last couple years, we did see a little bit of an ebb in the market. Now we're back to a position I feel like we've been in for the last decade where let's focus on quality of revenue.

Thank you very much. That's all for me.

Thank you. Thank you.

Thank you. I'm showing no further questions at this time, and I'll turn it back to Ned Coletta for closing remarks.

Thank you very much. In closing, I want to reiterate how proud I am of the team and how excited I am to lead Cassella into our next 50 years of growth and achievement. We've built a company defined by discipline and execution, thoughtful growth, long-term value creation, all grounded in our mission of safe, sustainable waste services. Thank you for joining us today. We look forward to speaking with you next quarter as we continue delivering on our mission. Thank you.

Thank you for your participation in today's conference. This has concluded the program. You may now disconnect.