Good day. Thank you for standing by. Welcome to the Casella Waste Systems, Inc., Second Quarter 2023 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 this session, you will need to press star one one on your telephone. You will then hear an automated message advising you that your hand is raised. To withdraw your question, you'll need to press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Charlie Wohlhuter, Director of Investor Relations. Please go ahead. All right. Thank you, Michelle. Good morning. Thank you everyone for joining. With us today are John Casella, Chairman and Chief Executive Officer of Casella Waste Systems, Ned Coletta, our President and Chief Financial Officer, Jason Mead, our Senior Vice President of Finance and Treasurer, and Sean Steves, our Senior Vice President and Chief Operating Officer of Solid Waste Operations. Today, we will be discussing our second quarter 2023 results, which were released yesterday afternoon. After a brief review of those results and an update on the company's activities and business environment, we will be answering your questions. 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 annual report on Form 10-K, which is on file with the SEC. In addition, any forward-looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if our views change. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to today, July 28, 2023. Also, during this call, we will be referring to non-GAAP financial measures. These non-GAAP measures are not prepared in accordance with generally accepted accounting principles. Reconciliations of the non-GAAP financial measures to the most directly comparable GAAP measures, to the extent they are available without unreasonable effort, are available in the appendix to our investor slide presentation, which is available in the Investors section of our website at ir.casella.com, under the heading Events and Presentations. With that, I will now turn it over to John Casella, who will begin our discussion. Thanks, Charlie. Good morning, everyone, and thank you for joining us. Welcome to our second quarter 2023 conference call. Before I comment on the quarter, I'd like to take a moment and talk about the communities that were impacted by the severe flooding across our footprint earlier this month. I'd also like to recognize our team. Many of our people have been on the front lines, helping our communities recover. Some of that damage, absolutely catastrophic in some areas. In Vermont, Waterbury, Weston, Montpelier. Our Montpelier operation, itself was under 5 feet of water. You know, hats off to the entire team there, Billy Heron, Pat, Mike, all, all of the entire team did, you know, a hell of a job. They were up and operating within 2 days of being under 5 feet of water, one of the first businesses in Montpelier to get back up and operational. Also, in Vermont, significant damage in Berlin, Londonderry, Barre, significant amount of damage in Ludlow as well. In New York, Clinton, Essex, and Franklin counties, along with other areas in upstate New York, communities in Western Massachusetts, such as North Adams and neighborhoods across our new markets in Pennsylvania, were all impacted significantly by the weather. Hats off to the priority response teams, the team that's put together by Sean Steeves, that takes assets, people, trucks, containers from different areas of our footprint where they weren't impacted and brings those resources to the affected areas. Again, many of our people have worked tirelessly and selflessly to help the affected areas across our markets, to restore conditions, remove debris, and get things back to normal. We've also done some fundraising as well, fundraising effort to help support those affected during very difficult time. So far, our relief fund has raised just under $100,000, $86,000, to help people who have experienced loss and hardship. Also, there's a spot on our on our homepage if anybody would like to donate to the relief fund. Again, I'm, I'm, I'm incredibly proud of the efforts of all of our people and the work that they've done to help people recover from, you know, what, in many cases, was catastrophic damage. Every bit as much damage as we had in a lot of cases, similar to Irene. Moving on to the performance for the quarter. We're pleased to share with you our continued strong results and updated outlook, which demonstrates our focus on operating performance, disciplined growth, and driving shareholder value. We are executing well against our key strategies as reflected in the results. We also had several key announcements recently, culminating with the acquisition of GFL's Mid-Atlantic operations on June 30th. Our entry into the Mid-Atlantic presents a great long-term opportunity to grow the business, expand our platform into adjacent markets. Over time, we look forward to the potential to continue to grow both organically and through acquisitions. Less than one month into the GFL-related acquisition, operations and service are smooth, and we're highly focused on establishing the Casella's culture and core values. Once again, we welcome all of our new team members. As reported in yesterday's press release, we grew Adjusted EBITDA by 5.5% year-over-year in the second quarter, expanded our margins 80 basis points, and grew Adjusted Free Cash Flow. Results from our solid waste operations once again shined this quarter on the hard work of our team. After a strong start to the year in the first quarter, solid waste Adjusted EBITDA margins expanded over 220 basis points year-over-year for the second consecutive quarter this year, and we're over 31%, EBITDA margins in the second quarter. These, these results demonstrate the strong operating plan we have in place to drive productivity and higher returns while keeping safety front and center. Our ongoing investments in automated trucks, route optimization, onboard computers, are adding value across many areas, from safety to efficiencies. Our pricing programs complement these efforts with 7.7% price on solid waste in the quarter, helping to offset inflation. Recycling commodity prices remained well below last year's level, as we expected. While recycling prices were down 53% year-over-year in the second quarter, our risk mitigation programs are working well to limit the impact. We expect the headwind will ease moving through the rest of this year. At the onset of the year, we took a conservative outlook on recycling commodity prices, and that remains intact. All said, the business is performing well, as reflected in our updated guidance, and we look forward to carrying this strong momentum into the remainder of 2023. A brief review on, related key strategies. We continue to be focused on increasing returns across our disposal assets. Improving the quality of revenue of our inbound streams is a major focal point. We measure this through our average landfill price per ton, which was up nearly 10% in the quarter, to help us stay ahead of inflation across many categories, from daily operations to our capital spend on cell construction and machinery and heightened regulatory costs. Notably, we are also capping at several sites this year, which reflects our commitment to further lowering emissions and improving gas capture for renewable energy. On this topic, in mid-July, we announced the signing of an agreement with Waga Energy to build and operate RNG facilities at three of our landfills. Waga's proven track record and expertise in this field proves to us that they are a strong partner to lead the next stage of our RNG development projects. We expect RNG to be another opportunity for driving higher returns and sustainability across our landfills. On the collection line of business, in terms of the second quarter, great execution once again, through the leadership of Sean Steves and his team. We posted another strong quarter with both Adjusted EBITDA growth and margin expansion in collection operations exceeding our budget in the quarter. As I highlighted, our cost reduction investments and operational initiatives improved several of our key operating metrics, both sequentially and year-over-year. We accomplished this while maintaining a high level of service excellence. Looking ahead, our focus remains the same. As of the second quarter, 60% of our routed fleet have onboard computers, and over 50% of our addressable residential collection fleet is automated. This strategy is paying off. We still have room for further operational enhancements and investments to drive higher returns. Resource solutions. Notably, as of mid-June, our fully upgraded Boston Recycling facility is up and running. Recycling is a part of the core of this company. This approximately $20 million investment represents a meaningful component of sustainability to many, many customers in the greater Boston area. The upgrades are expected to drive higher material throughput, enhance end product quality, and improve operating efficiency while advancing the safety profile of the facility. Like any investment we make, we balance environmental stewardship with economic returns to support the longevity of our programs and services. Our SRA and other risk mitigating features in our contracts are examples which have greatly limited the financial impact of current recycling prices. Including the Boston MRF, we expect positive contributions to our results from our recycling operations over the remainder of the year. I'd like to highlight our capital allocation and growth strategy. Following our recent debt and equity raises, the strength of our balance sheet positions us well to continue growing the business and driving further free cash flow growth. Our acquisition pipeline of about $500 million in annualized revenues over the top of the Northeast footprint, combined with approximately $400 million around our Mid-Atlantic operation, provides great opportunity for us. We will remain opportunistic in our approach. Aside from the GFL operations we acquired in June, we announced the pending acquisition of Twin Bridges in New York, with approximately $70 million of annual revenues. The acquisition cleared HSR review on July 14th, currently being reviewed by the New York Attorney General's office, and is targeted to close by the fourth quarter. Overall, we have a strong runway that positions us for continued growth and driving long-term shareholder value. We look forward to our continued ability to grow in a disciplined, disciplined fashion. With that, I'll turn it over to Ned for some more detail on the financials. Thanks, John. Good morning, everyone. Revenues in the second quarter were $289.6 million, up $6 million or up 2.1% year-over-year, with 1.8% of the year-over-year change driven by acquisition activity. Solid waste revenues were up 7.6% year-over-year, with price up 7.7%, acquisition growth of 2.5%, with volumes down 2.6%. Revenues in the collection line of business were up 9.2% year-over-year, with price up 8.2% and volumes down 2.3%. Volume declines were primarily driven by higher churn in the residential line of business associated with pricing programs. We experienced lower roll-off activity split between industrial customers and temporary construction jobs. With these declines, we improved the quality of revenue, grew our Adjusted EBITDA, and expanded margins in both of these lines of business. Revenues in the disposal line of business were up 5.7% year-over-year, with landfill pricing up 7.7%, while landfill tons were down 6.1%. The landfill volume declines were entirely driven by lower-priced special waste volumes that were down year-over-year. As expected, Resource Solutions revenues were down 11.6% year-over-year, with our average commodity revenue per ton down roughly 53% on lower cardboard and mixed paper pricing, lower metals pricing, and lower plastics pricing. This decline in commodity prices was partially offset by 7.6% growth in processing fees at the MRFs. Commodity prices hit a high point in April 2022, and then declined 67% through the remainder of 2022, hitting a multiyear low last December. Commodity prices have rebounded from this low level, up roughly 30% sequentially from December through June. Adjusted EBITDA was $72.2 million in the quarter, up $3.7 million or 5.5% year-over-year, with $2.8 million of the growth driven by improvements in our base business and $900,000 derived from acquisitions. Solid waste Adjusted EBITDA was $68.4 million in the quarter, up $9.5 million year-over-year, with collection and disposal both up year-over-year. Resource Solutions Adjusted EBITDA was $3.8 million in the quarter, down $5.6 million year-over-year, with the negative performance mainly driven by two factors. Adjusted EBITDA was down roughly $3 million due to lower commodity prices. Our risk mitigating commodity programs helped to offset most of the significant drop in commodity prices. Unfortunately, these programs are not fully implemented in several newly acquired markets that had legacy contracts that do not allow us to pass recycling risk back to customers. These markets accounted for roughly 60% of the year-over-year decline from commodity prices. Adjusted EBITDA was down $2.5 million at our Boston Recycling facility, as the facility was shut down for most of the quarter as we completed a full technology upgrade. Revenues were lower as we displaced volumes, and costs were higher as we had to transload volumes to other facilities. Adjusted EBITDA margins were 24.9% for the quarter, up 80 basis points year-over-year. Solid waste margins were 31.4% in the quarter, up 230 basis points year-over-year, partially offset by the weakness in Resource Solutions. Our pricing programs, once again, covered cost inflation in the quarter, with solid waste price as a percentage of total revenues up 6.4%, partially offset by 490 basis points from inflation. Further margin bridging items include a 45 basis point improvement, driven by solid waste operating efficiencies, partially offset by the lower volumes. A 35 basis point tailwind from lower fuel cost, net, lower recovery fees. These were partially offset by a 105 basis point headwind from the shutdown at the Boston MRF and lower recycling commodity prices, a 35 basis point headwind from lower landfill gas to energy performance, and a 10 basis point headwind from acquisitions. Moving on, the second quarter included several unique items in the income statement that we highlighted in our press release and also have additional disclosure in our 10-Q. They included a $6.2 million legal settlement charge in connection with the settlement of a class action litigation matter relating to the Fair Labor Standards Act and state wage and hours laws, and an $8.2 million loss for the termination of bridge financing for the secured and unsecured bridge loans associated with the acquisition of the GFL operations and the pending Twin Bridges acquisition. Excluding these non-recurring items and several other one-time costs, adjusted net income was $18.8 million in the quarter, flat year-over-year. It was a busy quarter for our team from an M&A and financing perspective. On April 3rd, we acquired a hauling and transfer company with approximately $10 million of annual revenues. On June 30th, we acquired GFL Solid Waste operations in Pennsylvania, Maryland, and Delaware, with approximately $185 million of annualized revenues. On June 9th, we entered into the asset purchase agreement to acquire Twin Bridges assets with approximately $70 million of annual revenues. To support these acquisitions, we completed several financing events. We entered into a $375 million secured bridge financing to provide committed capital for the GFL transaction. This bridge was never drawn, and on May 25th, it was terminated when we entered into the $430 million delayed draw Term Loan A. The Term Loan A is priced on a grid with an initial pricing at SOFR plus 2.375. This pricing will drop to SOFR plus one and seven-eighths next quarter. In addition, we entered into a $200 million unsecured bridge financing to provide committed capital for the planned Twin Bridges transaction. This bridge, again, was not drawn. On June 16th, it was terminated when we closed on the $517.5 million common stock offering. As of June 30th, post the GFL acquisition, we had $1 billion of debt, $466 million of cash, liquidity of $738 million, including the availability on our revolver. Our consolidated net leverage ratio was 2.35x. Our average cash interest rate was approximately 3.74x. We had fixed interest rates on 64% of our debt. We have earmarked approximately $219 million of cash on hand to complete the Twin Bridges acquisition. Post the Twin Bridges acquisition, we will still have significant liquidity to support our M&A pipeline, with a focus on building additional density in the Mid-Atlantic and across select Northeastern markets. While Adjusted Free Cash Flow started the year a bit light due to working capital and capital expenditure timing differences, these headwinds were mainly resolved in the second quarter. Adjusted Free Cash Flow was $49 million year-to-date through June, up roughly $2.8 million year-over-year and on track to hit our fiscal year guidance range of $123 million-$129 million. Given the expected contributions from acquisitions closed through the first half of this year and the expectation that our solid waste operations will continue to perform well against budget, we increased our revenue, Adjusted EBITDA, and Adjusted Free Cash Flow guidance ranges for the year. However, given the negative impact of the several non-recurring items I focused on earlier and the higher interest expense associated with the financings, we have lowered our net income guidance for the year. The updated guidance ranges include the contribution from the acquisition of the GFL assets, but do not include the pending acquisition of Twin Bridges. As always, we'll update our guidance after completing the acquisition. As part of the updated guidance ranges, we increased our Adjusted EBITDA guidance range by $23 million, with roughly $20 million of this increase associated with the newly acquired GFL operations and $3 million from the base business. As I mentioned earlier, our internal rate of inflation is running at about 4.9%. That's down over 100 basis points from last summer, and we, we definitely have seen inflation cool off a bit in the business. We do expect to outpace this inflation and increase Adjusted EBITDA margins by 70 basis points for fiscal 2023, which is an improvement from our prior guidance range. We are forecasting solid waste price to be up 6.5%-7.5% and volumes to be flat through the second half of the year. In addition, we forecasted recycling commodity prices to remain flat at current levels through the remainder of the year. We have conservatively increased our fiscal 2023 Adjusted Free Cash Flow guidance range by $4 million, with all of this increase associated with the newly acquired GFL operations. While we expect continued operating cash flow growth and the working capital timing differences to further resolve through the remainder of the year, higher capital expenditure costs due to inflation and higher interest costs offsetting this growth in the existing base business. With that, I'll turn it back to the operator for questions. Thank you. Thank you. As a reminder, if you would like to ask a question at this time, please press star, then one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. One moment while we compile our Q&A roster. Our first question is gonna come from the line of Tyler Brown with Raymond James. Your line is open. Please go ahead. Hey, good morning, guys. Good morning. Good morning. Hey, you know, lots of detail as usual. Nick, can we, can we kind of go back over some of the margin pieces? I think you said fuel was 35 basis points, and then I, I couldn't tell, was it commodities and Boston was 105? Can you just walk through that a little bit, a little bit more? Yeah, sorry. Yeah, there's a few numbers there. You know, we had solid waste price as a percentage of total revenues was up 6.4, with inflation dropping that by 490 basis points. We had positive good guys of a 45 basis point improvement, which in the solid waste business. 35 basis point tailwind from fuel, net of so lower fuel prices, but we also had lower surcharges. We had a 105 basis point headwind, and that was Boston and recycling commodity prices. A 35 basis point headwind from landfill gas to energy, and 10 basis point headwind from acquisitions. Okay. Okay, then as Boston kind of turns back on, does that become a margin good guy in the back half? Is that the right way to think about it? It, it does. You know, we're expecting about $1.5 million-$2 million of positive impact in the second half of the year from Boston. You know, we're still in that 90-day shakedown phase. It started off the second to third week of June, and this is one of the more technologically advanced processing facilities in the country. Machinex is doing a great job, but, but there's a lot of work to get all of those obstacles and, and belts completely in sync. That will continue to happen, but, but we're really positive about where we sit. The next year, you think about it, you get the positive from the benefit of the investment, but you also get rid of that negative comp in the year. you know, this is gonna be like a $6+ million, you know, tailwind coming into next year, which will be. Hmm really positive for the resource business. Plus, I would assume you readdress contracts without SRA fees. Yeah. We talked about this last quarter. There's a handful of them out there, and, you know, there's a couple notable ones in Connecticut. There's a few notable ones around our, our Western Mass, recycling facility as well. And there are $2 million a year of negative headwind, and, you know, we've very successfully, over the last decade, have worked with communities and different businesses to share that risk more effectively. You know, we don't have an expectation that we can't do the same thing here over time. Yeah, those are- Yeah ... really related, as you know, I think, Tyler, to acquisitions. Yeah. Those contracts all came with acquisitions, and. Right we'll renegotiate them at the end of the contract, obviously. I wanted to kind of hit on volume. It came in a bit weak. You gave some color, it's interesting because this is actually something we've seen with a couple of the other guys that have reported. Maybe it's idiosyncratic, maybe not. Can you kind of help bridge that down 2.6? Was it just broad weakness, or was there something idiosyncratic that it felt like in your franchise? Yeah. I, I, you know, I listened to Waste Management earnings, and I, I'm not sure much of what we saw is not all that dissimilar. At the landfills, we saw MSW volumes basically flat, and we saw C&D up a little bit, which, which is interesting. We saw almost every single special waste category down. We saw sludges down, which is a little bit of our own doing because we're trying to have less of those materials in the landfill. We saw all other special waste categories down: contaminated soils, sludges, ashes, you name it, asbestos and other categories were, were down in the year. We also saw industrial roll-off activity down, and we've seen our pipeline stretch out a little bit there. I, I think what it really is, as, as everyone knows, you know, industrial companies, large businesses, are, are looking around themselves and, and slowing their capital cycle a bit, just given the, the, the banking crisis and some of the stress in the economy, while the consumer remains strong still. You know, some of these projects that might be a bit discretionary in nature or investments are, are getting pushed off a bit, and we're seeing that flow through both on the roll-off side of the business and into the special waste categories at the landfill. On the residential side of the business, you know, Sean and his team, and the, the temporary roll-off side, they're just trading price for, for quality of revenue and making sure we have the right mix in our business. As you know, like every other trucking business, we struggle to always fill the seats and have high quality drivers and mechanics. You know, we've been in a mode of making sure we really wanna do business, and we're doing it for the right return level, and it's a big focus of the team. You see a little bit of that churn there. Not a lot of it's stuff we're, we're disappointed about. We're improving margins and quality of revenue. Okay. Then is it, in the guide, kind of flattish volume in the back half? Is that what I heard? Yeah, that's where we are right now. A little more visibility on some special waste projects, plus the comps are a bit easier. Last year started off a bit hotter on volumes and, and tailed off through, through the second half of the year. Okay. Then, Jason, just a two modeling questions. What is the M&A contribution for this year in the guide today, which excludes Twin, Twin Bridges? Roughly, what is that in solid waste? Then what, what should we expect kind of the run rate on interest expense to be? Yeah, just one clarifying point, and Jason can hop in. The guide does not include Twin Bridges. It just includes- Correct. Correct. ... the GFL operations. Yeah. Yeah. Hey, Tyler. GFL, in the back half of the year, in terms of revenues for Q3 and Q4, roughly $91 million in revenues in the second half of the year. We have, in terms of rollover from acquisitions completed, in 2022, we've got roughly another $3 million of revenues that will be in the back half of 2023. We had about $12 million in the first half of the year. We completed a tuck-in acquisition in April of this year, Triple T Trucking, that we announced with our Q1 earnings. That was roughly $9 million in annualized revenues. We'll get the, you know, pro rata portion of that in the second half of 2023. Okay. Okay, that's helpful. Then, John, I got maybe my last one here. I, I read an article a couple of weeks ago, I think it was, about an intent to reopen Hardwick. I know it, it sounds like it's kind of far away, and there's a lot to do to get there, but I'm just curious if those reports were correct, and what was the driving factor in looking into that? Yeah, actually, it was a development team associated with a community that came to us and asked us if we would be interested in working with them to potentially reopen it. So it's, it's true. We made a presentation to the board. Brian Oliver made that presentation about three weeks ago to the board. It is very early in the process. There's a lot of heavy lifting to be done, but there is capacity there for 20 years. We're, you know, we're happy to, you know, push forward, to the extent that we continue to enjoy, favorable response from the community. It's, it certainly, is a possibility for additional capacity in the future. To flash back in time, this was a site that did not run out of capacity, but, but needed some zoning changes. Mm-hmm. So it really, it hinges on great support for us to invest here. Yeah. Okay. Something to stay tuned. That seems like it's kind of a ways away, but we'll, we'll keep an eye on that. It is. Okay. Indeed. Indeed. Okay. All right, listen, I'll turn it over. Appreciate the questions. Thanks, Tyler. Thanks, Tyler. Thank you. One moment for our next question. Our next question is going to come from the line of Michael Hoffman with Stifel. Your line is open. Please go ahead. Good morning. Hoping it's sunny in Vermont today, not raining. Good morning, it is Michael. It's hard to believe, but the sun is out. It rains almost every other day. We had 3 inches of rain yesterday afternoon, so it may be coming towards you, unfortunately. On, on recurring revenue volume, can we talk about underlying characteristics of the recurring revenue volume? I think of small container, service interval changes, new business formation, you know, large container, permanent inside office buildings, schools, things like that. What are those trends like? Yeah, JT, you want to hop in on that? Yeah, I'll start. Hey, Michael. In the second quarter, just focusing on our commercial line of business, where many of those attributes would be, Michael, our volume in the commercial collection line of business was flat year-over-year in the quarter. We did experience net new business activity in the quarter in terms of net new revenue from a sales perspective, i.e., we gained more new accounts than we lost. Yards per lift were flat from an operational metric perspective, and price was quite positive in the quarter in our commercial line of business, up about 9%, and we expanded Adjusted EBITDA margins by about 100 basis points. Okay, that's terrific. Just to touch on your renewable energy, can you tell us what your current amount of MMBtu we're playing with, and then what the development with Waga would add? Yeah. We've got two projects under development, one at our North Country landfill in New Hampshire and one at, our Juniper Ridge landfill in Maine. Charlie, is that one- Well, those two projects combined are about $1.3 million. 1.3 million MMBtus. Then we just announced this partnership or a commercial agreement with Waga, where they will develop the infrastructure at three of our sites, and they'll own that infrastructure, invest in it, develop and operate it, and we'll receive revenue shares and from the gas sales and rents. That'll initially be about 1.3 million MMBtus as well, 1.2-1.3 million. That contracts, you know, we think is very favorable and can create quite a bit of value for shareholders over time. It'll take about two plus years to get those sites permitted, built, and online, but some real benefits after that point. When you refer to margin headwind from landfill gas, is that electricity-based? Oh. in the quarter? Yeah. We still have a number of facilities that are producing electricity, and we definitely saw a decent-sized headwind year-over-year in those facilities, as RECs and power sales were down. Okay. Back to Boston for a second. We've been hearing through various sources that, you know, the Boston three-year or five-year three contract renewal cycle starting for 2024, that they may actually extend you and not go through a contracting process and focus on just collection and disposal since the disposal side may be up so much. Do you, do you have any color on that? That'd be good. You put $20 million in there, and you've got an assured rollover into the next sort of three to four years. Yeah, I, I don't think that we have any, any comment on it at this point in time, Michael. I, I, I think that in ordinary course of business, they would go out to, go out to bid. It's, it's certainly a possibility, but it's, it's nothing that we would comment on at this point. Okay. Fleet replacement, how are you stand there, and what's the sort of positive impact to repair and maintenance cost, if that's improving? Yeah, it's, we've had a little bit of uptick, Michael, this is Sean. Sure. Truck delays, nothing out of the ordinary. The fleet's in the best shape it's been in, in the history of the company, actually. We've went thoroughly through the GFL trucks, and we're pleased with what we have down there. We have some automation opportunities, and, all in all, it's looking good. Yeah, Sean, probably our highest inflationary categories are still parts, tires, maintenance, outside repairs are some of our highest inflationary categories. Then on the capital side, you know, trucks, yellow iron, and landfill construction are still, still pretty heightened as well. We see those as outliers that aren't dropping as fast as, as other categories. Okay. Can we get an update on two sort of landfill scenarios, the sort of, New Hampshire, Bethlehem, you know, Dalton status, and then McKean timeline? Sure. McKean's under construction now. I, I think we talked about, we, we received all of our permits last quarter, under construction, anticipate early 2024 with McKean beginning to ramp. It'll take one or two years to ramp. Don't expect to, you know, see significant tonnages on the start. It'll ramp over a period of time. The Dalton facility, just moving forward with permits, nothing really to report there. Just continue to move forward from a permitting perspective. Same thing with regard to Highland. We're doubling the permit at Highland, host community agreement in place, and Sam and the engineering team are working with DEC to expand that permit as well. We expect to have that, probably, I would say, towards the end of the year. Okay. Then I have to ask it, 'cause you bought GFL, so when do we hear about your first M&A deal in the PA, Maryland, Delaware market? Well, we might wanna do a little more integration, Michael, maybe, you know, another, another week or two of inter- No, only kidding. I mean, I think that, clearly, Kyle, you know, the real benefit of having Kyle, who managed those assets, and then having him work for us from a business development standpoint, we do have, a great portfolio of opportunity there. So it wouldn't be surprising to see something, you know, happen. But, we're really focused on the integration at this point in time, and wanna get that, you know, done very well, which the team is, you know, in the midst of at this point. I, I wouldn't anticipate something, you know, on an immediate basis, but the portfolio is. There's just terrific opportunity there, so it will begin to happen quick enough. Okay. Thank you very much. Yeah. Thank you, Mike. Thank you. One moment for our next question. Our next question is gonna come from the line of Sean Eastman with KeyBanc Capital Markets. Your line is open. Please go ahead. Hi, team. Thanks for taking my questions. I just wanted to come back to the 2023 guidance update, specifically the organic update. I mean, I think the M&A part of it is straightforward, but I just wanted to understand that, I think it was $3 million kind of underlying EBITDA raise. Wondered if, you know, maybe that underlying raise is a little juicier than it might seem, if you're overcoming some of these volume headwinds that weren't anticipated. Obviously, the weather has been challenging. Any color on that would be helpful? Yeah, I mean, it's a good point because we're a little bit lower on the recycling side than we had expected. We have a bit more headwind there, and we've seen a little bit weaker special waste volumes. You know, this is really a raise on the strength of great investments and great execution on the hauling side of the business and other areas where we've been able to flex costs and drive efficiencies and execute our plan. It's a good point. You know, it is, it is really, you know, important to note that, that, you know, even with a little bit of weakness in volumes, you see what we're doing on the margin side of the business, and it's pretty incredible. I mean, we increased margins 230 basis points while shedding some volumes, and, and that really shows the ability for us to be nimble. The investments we've had in systems like Power BI that give us good real-time tracking and our onboard computing and, and automation, our ability to reroute trucks is allowing us to take, take costs out of the system rapidly. That, that's helpful. Then, and then I'm trying to think through the, you know, the margin bridge for next year, with all the moving parts in the model. You know, you know, usually we're starting at that 50 basis points kind of baseline entering the year. You know, we know recycling is gonna be a tailwind. We've got some M&A dynamics going on. You know, maybe that price cost spread visibility is looking pretty good into next year with inflation coming down. Just curious where your head's going, as we think through that assumption? Yeah, we've had a lot of moving pieces recently, as you, as you correctly reflected. We really haven't done a lot of updating to our models. We're just stepping into budgeting right now. All of the points you made are valid, that recycling becomes a good guy into next year, given the Boston shutdown, even if commodities were a little weak, we still would have some tailwind there. Our outpacing of inflation, that will continue with our pricing programs. We're very confident there. The operating programs, we still have multiple investments we're making this year into next year to drive more returns in that space. Then you look at the acquisitions. I mean, they're coming in at good margin points, and they're not dilutive, day one. We could be setting up to a year that, that could be better than 50 basis points. I think we got more work to do before we, you know, start to guide next year, but, but your perspective is fair. Okay, got it. Then last quick one for me. Just, just looking at the, you know, the bridge from kind of vanilla free cash flow to Adjusted Free Cash Flow, those two acquisition-related items that step up, you know, kind of unsurprisingly around a large deal being folded in. I just wanted to make sure I understand what's going in there on this post-acquisition and development CapEx line and this cash outlays from acquisition activities line. Just understanding what those adjustments are. Yeah. The cash outlays from acquisition activities, it's lawyers and consultants and, you know, accounting work and stuff like the engineering work. Then the post-acquisition and development capital expenditures. You know, some of the initial dollars we put to work, right, when we get on the ground to drive synergies or to fix facilities or safety issues, it's always contemplated in our pro forma, but we carve that out separately, just as a line item to give clarity of that additional investment we're making in those businesses in the first, 18 months. Okay, thanks. Thanks for all the perspective. Thank you, Sean. Thank you. One more moment for our next question. Our next question is gonna come from the line of Stephanie Moore with Jefferies. Your line is open. Please go ahead. Hi, good morning. Hi. Morning. Maybe touching on what you're seeing, and, and with maybe some of your competitors on the private side. Both, you know, I guess two-part question. First, what are you seeing maybe from an appetite, from an M&A standpoint, in that, that portion of the industry? Then secondly, are you continuing to see, I think, maybe the same level of, you know, rational activity around pricing with those competitors that we've seen over the last year, or, maybe any change, change on that front would be helpful? Thanks. I think that there's there's significant activity. I mean, I think when you look at inflation, the challenges, recycling commodity prices, the atmosphere from an M&A standpoint is very strong. You know, businesses that historically we really didn't think would be for sale, are for sale. So activity there is, is really, is really strong. Can I add one thing, John? Yeah, sure. We're not seeing the private as active buying things because their access to capital has maybe dried up a bit. Yeah. Yeah. I mean, I, I think that there's not a, a great deal of activity. Certainly on larger transactions, you'll see activity and higher pricing, but on smaller transactions, not a lot of, not a lot of, activity from a competitive perspective. On, on pricing, you know, John kind of answered that in the first part of this question, where there, there's a lot of inflation out there, and, and, recycling has been a really big headwind, I think, for, you know, companies across the Northeast in the last year. That cost of capital, is a big deal, I, I think, for smaller companies. You know, they're all looking at the same things we're looking at, and that they're making sure they can cover their costs and cover the cost of capital. And, and- increasing prices. Yeah. In addition to the, you know, disposal, increases, labor difficulty, I mean, there's just a significant amount of activity that is driving M&A, and it, it, as Ned said, there's not a lot of activity from a competitive standpoint on the smaller deals. No, that's really helpful. Then maybe just a follow-up to, a follow-up to that point, and you probably kind of already answered part of it. In terms of you, of you thinking the go-forward opportunity to price, so even as inflation continues to come down, how do you view just the, the overarching pricing opportunity in, in your markets? Yeah, it's interesting. Like, we see, you know, the headline stat coming down, but I mentioned a minute ago that, that some costs that hit our specific industry are still pretty high. I mean, we see it across parts, maintenance, outside repairs, tires. Then you move over to some of the construction elements, and we haven't seen inflation peak yet. It's still quite high into this construction season at landfills, and some of the equipment side is still very far out to get the equipment and the demand's high there, we haven't seen prices start to, you know, come in on that side. From our vantage point, you know, in our pricing programs, it's business as usual. We're gonna be out there trying to recover and recover slightly in excess of inflation and be nimble with what we're doing on the street. That's our intention through the rest of the year and into next year. Our goal always is 50 basis points ahead of inflation, is our goal when we're looking at pricing programs. Absolutely. All right. Thank you so much. Good. Thank you. You're welcome. Thank you. I'm showing no further questions at this time, and I would like to turn the conference back over to John Casella for any further or closing remarks. Operator, I think we do have one follow-up. I do. I see Mr. Hoffman, so just one moment. Go ahead, Michael. Michael Hoffman, your line is open, sir. Hey, thanks. I just wanted to follow up on the dialogue in the last question, because I think it's important for everybody to understand that as inflation comes down, the rate of change in price is gonna narrow. What's really important... There's a statement inferred in a question here: Can you talk about the discipline around managing the spread, even as the rate of change narrows? I think it's important... Yeah for the market to understand that industry is really good at that. You're good at it, and therefore, even if the price is 100 basis points lower next year, you'll still have the spread. Yeah, I should have been clearer, too, Michael. You're aware of this, but maybe not everyone is on the call. Over 70% of our collection book of business is not tied to CPI. They're contracts where we have the ability to price as necessary in whatever inflationary environment. That's how we've structured many of our agreements and contracts. We do have some CPI linked or set prices and contracts. Our book of business may be a little different than our peers, and we can be very nimble and make sure that we're maintaining that spread. If inflation does start to come down, we may course correct our pricing to a lower level, as you said, but we're still working always to outpace inflation by 50+ basis points. With our book of business and not being so CPI-linked, you know, we can be a little more nimble with that and, and make sure we get to that right price point. We've done great at this over the last five, six years and, and have done a very nice job. Okay. I just wanted to make sure we had that clarity. Yeah, thank you. Yep. Thank you. I do see another follow-up question. Just one moment. We have a follow-up question from the line of Tyler Brown with Raymond James. Hey, guys. How are you? Real quick follow-up. Hey, Tyler. Jason, did you,... You, you never answered my question, Jason, on the interest expense run rate. Oh, sorry. Yeah, sorry about that, Tyler. Yeah, as, as you came back into the queue, I realized what you were gonna ask, so no problem there. In our original guidance, our interest expense net that we guided to back at the beginning, beginning of the year was $26 million. In our updated guidance, we're at $35 million, which is reflective of the new Term Loan A, which is $430 million and funded on June 30th. That'll run at about $26 million of annualized interest related to that. We'll get half a year on that. Although we are experiencing higher levels of interest income as we have more cash on the balance sheet, we're putting some of that to work in conservative overnight investments with, you know, modest yields associated with them. That's a partial offset of about $5 million? Yeah, I would say maybe more than modest yields. We're getting, like, close to 5%. 5%, yeah. 5% is covering most of that interest cost. Yeah, it's a good offset. $35 million is our new guide on the interest expense line. Cash interest should come in at around $33 million for the year. How much we gain from cash in from income? About five, yeah. Offsetting the, the 35. That's within the 33. Got it. Yeah. Yeah. That's a net number? Correct. 33 is a net inclusive of the interest income. Okay. I think I got it. I appreciate it, guys. Thank you. Thank you. Now I'm showing no further questions, and I'd like to hand it back over to John Casella for any further remarks. Thanks, everyone, for joining us this morning. Look forward to discussing our third quarter 2023 earnings with you later on this year. Have a great afternoon. Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.