Good day, and thank you for standing by. Welcome to the Casella Waste Systems Fourth Quarter 2023 Earnings Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Charlie Wohlhuter, Director of Investor Relations. Please go ahead.

All right. Thank you, Victor. Good morning, and thank you for joining us on the call today. With us are John Casella, Chairman and Chief Executive Officer of Casella Waste Systems; Ned Coletta, our President; Brad Helgeson, our 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 discuss our fourth quarter and full year 2023 results, which were released yesterday afternoon. After a review of these results and an update on the company's activities and business environment, we will be happy to take your questions. But first, please note that various remarks we may make about the company's future expectations, plans and prospects constitute forward-looking statements for the purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the Risk Factors section of our most recent 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, February 16, 2024. 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 included in the appendix of our investor slide presentation, which will be available in the Investors section of our website at ir.casella.com. And with that, I will now turn it over to John Casella to begin our discussion.

Thanks, Charlie, and good morning, everyone, and welcome to our fourth quarter 2023 conference call. This was an exceptional year for the company and illustrates the success that we continue to have in terms of executing against our key strategies. I'm excited about the opportunities that lie ahead. First, we will highlight our performance for the year. Then I'll pass it on to Brad and Ned, who provide more specific comments around our results and strategies. Our performance in 2023 reflects the successful investments we made across our business, deploying capital for return-driven growth. Our focus on our people and operations is helping us improve safety and turnover, while delevering exceptional service -- delivering exceptional service and driving more productivity. We're also experiencing notable operating benefits from our Boston MRF following the full equipment upgrade this past summer. I'm also excited to announce that we have similar plans to fully upgrade the processing equipment at our Willimantic, Connecticut recycling facility later in 2024. We continue to invest in and further modernize our sustainability infrastructure. Our disciplined approach strikes the right balance between economic returns and providing benefits to the environment. As I noted in our press release yesterday, completing seven acquisitions was an exciting and notable achievement in 2023, given the size and the new markets we've entered. I'm very encouraged by the early results of our Mid-Atlantic region and other acquisitions that we completed in the year. A real shout out to the Mid-Atlantic team to Kyle and his team who have done a terrific job of integration and bringing the Mid-Atlantic up to speed in terms of the Casella culture. The level of engagement of our new team members is really impressive, which helped facilitate the transition and integration process. It includes implementing our strategy, developing our sales…

Okay. Thanks, John, and good morning, everyone. I've been with the company for a little over three months now and I'm really thrilled to be part of the team. Ned left some big shoes to fill, but obviously, he remains by my side. Moving on to the quarter. Revenues in the fourth quarter were $359.6 million, up $87.4 million or 32.1% year-over-year, with $71.7 million of the change driven by acquisition activity and $15.8 million of organic growth or 5.8%. Solid waste revenues were up 40.4% year-over-year with acquisition growth of 34.3%, price up 6.7% and volumes down 1.4%. Revenues in the collection line of business were up 54.8% year-over-year, with price up 7.2% and volumes down 2%. Volume declines were primarily a result of softness in temporary roll-off activity and customer churn, driven by our efforts to improve quality of revenue and margins in the residential line of business. Revenues in the disposal line of business were up 8% year-over-year, with landfill pricing up 6.9%, landfill tons down 3.7%, reflecting softness in C&D volumes in the market, while MSW and special waste volumes were essentially flat. Resource solutions revenues were up 8.8% year-over-year with price up 5.2% across the segment and acquisitions contributing 3.8%. Price growth was driven by an increase of 81%, or $45 per ton in our average commodity revenue over the historically low prices of Q4 2022, though this was muted by lower shipping fees that adjust to share higher commodity prices with our customers. Stepping back, recycled commodity prices have ridden a roller coaster over the past two years, with a multi-year peak in the first half of 2022 and trough in the second half, followed by a moderation of volatility and sequential recovery in prices over the course of 2023. Overall, commodity prices were…

Thanks, Brad, and good morning, everyone. 2023 was an exciting year for Casella, as we've continued to execute extremely well against our long-term strategic plan. And this execution is clearly demonstrated in our financial results for the year. This growth was driven by continued execution against our operating efficiency programs, organic revenue growth and pricing initiatives, robust acquisition activity, key development projects and continued investment in our foundational pillars. As outlined by John earlier, we completed seven acquisitions in 2023 and acquired approximately $315 million of annualized revenues, including the expansion of our footprint into the Mid-Atlantic region. Completing the acquisitions was just the starting point and our team has worked very hard through late 2023 and into early 2024 to integrate the newly acquired businesses into our operations, systems and back office. We're tracking well against pro forma for each acquisition and expect to complete the remaining systems and back office integration work in the coming months. Kyle Larkin and our new Mid-Atlantic team are doing a great job executing against our operating plan, while working tirelessly on their critical integration efforts. The GFL team has been super helpful providing transition services and assisting us with successful migration off their systems and thank you to their entire team. Our western region team, led by Michael Stehman, has partnered extremely well with Scott Earl and the Twin Bridges team to quickly advance integration efforts to drive operating synergies and ensure top notch customer service through that acquired region. With the expansion of our operating footprint into the Mid-Atlantic in 2023, we have built our acquisition pipeline to over $800 million and we are positioned well to have another strong acquisition year in 2024. On the development side, we continue to invest in return-driven sustainability infrastructure, including the full equipment upgrade…

Thank you. And at this time, we'll conduct a question-and-answer session. [Operator Instructions] Our first question comes from line of John Mazzoni from Wells Fargo. Your line is open.

Good morning. Maybe could we just touch on...

Good morning.

Yes. Thanks, guys. Could you just quickly touch on some of the trends you're seeing within the disposal line, specifically around the volumes? I think we've kind of understood a lot of the Northeast dynamics here. But as we think about pricing on that kind of line item, what are you seeing in terms of tipping fees and other types of kind of early indicators for '24 and how should we kind of think about not only the cadence, but also any kind of step-downs or other types of items that might kind of impact the model? Thanks.

Yes. So overall, the same trends are going to continue in the Northeast. We've had sites closed, and we expect additional sites to permanently close over the coming years. But what's happening and what's happened over the last several months and into early '24 is as certain sites approach the end of their life, they want to just fill them up and they might even hold price steady or look for additional volumes. And we see this a bit with one of the large construction and demo debris sites that's going to close in the next year plus, and they're kind of sprinting to the end of the line. As such, we've seen a little pressure on the construction and demo side of volumes, but things are stable to positive, both in MSW, contaminated soils. On the pricing side, we've entered 2024 with a robust pricing plan at the landfills, kind of high-single digits again, and it's been well received in the marketplace. These price increases are well justified. Our inflation continues to run high on the landfill development side, capping, closing, regulatory environment continues to get more and more complex, and we need to get those costs back to the marketplace. So that softness in C&D, it's probably a little bit less about the economy in the Northeast than it is about just that rush for someone to close their site, get it buttoned up, and then you'll see the other side of that with some additional tightening in the market coming in '25.

It clearly bodes well for the next three to five years in terms of how we're looking at pricing for our disposal capacity. That disposal capacity is really worth more on a year-over-year basis. So, we're pretty excited in terms of the position that we set over the next three to five years from a landfill pricing perspective. And also in addition to that, we also, as many people know, have invested the capital to make sure that our McKean facility is up and operational. We don't anticipate significant ramping in 2024 at all, but the facility is up and will be up and operational at the end of this quarter.

Got it. Good color. Thank you. And maybe just a quick one on that inflationary kind of trend, it was helpful to kind of get that base rate. But as we think about the price cost spread in '24, could you just outline some of the main drivers between kind of what you're seeing on the inflation side and outside of kind of fleet, other types of kind of one-time items and also if you could quantify any potential kind of uptick or kind of tailwind from the commodity prices? And I think we kind of understand that you guys have less exposure on that side, but just anything in terms of kind of those inflationary buckets would be very helpful. Thanks.

Yes, it's Brad. So inflation remains stubbornly high. The company reported inflation north of 5% last year. We've seen that kind of trend down, but gradually in the fourth quarter, we were running just under 5% and looking at 4.5%. It really is across the board. We're seeing particular -- particularly stubborn inflation is in outside repairs. Ned alluded to this a second ago, the cost of relating to the landfills, those are up really across the board. Tires, that's a notable one. Labor is probably pretty consistent with our overall inflation rate. So we're not really taking a view at this point on further material moderating of that number. We kind of assume more or less where we are for the balance of the year. Based on that inflation number, we're targeting 5% to 6% price growth as we said earlier, that's across collection and disposal in the solid waste business. So looking to plus or minus maintain that 100 basis point spread if we can. And commodities, you asked about commodities. And as you mentioned, our model is such that the commodity prices don't impact us actually that much either way. But commodity prices look like they're going to be up certainly year-over-year, and the beginning of the year is bearing that out so far.

Great. Thank you.

Thank you. [Operator Instructions] And our next question comes from the line of Tyler Brown from Raymond James. Your line is open.

Hey, good morning.

Hey. Good morning, Tyler.

Hey, first off, Brad, great to hear your voice again on a conference call. But, hey, I just wanted to get a little bit more color on the veneer failure. So kind of a multi-part question. But one, John, have you had a slide like this before? Two, I may have missed it, but what was the determined root cause? Was it too much sludge or precipitation? And then three, it happened later in the quarter. So should we expect a spillover of expense into Q1?

Let me -- I'll talk a little bit about the veneer failure. The veneer failure really was stopped by the transportation roads that we had in the facility. And again, as Brad said, no one was hurt. It was a non-issue. It was all done by third parties. We're going through that from a practical standpoint with a third-party contractor, with the engineers to make a determination as to what caused it. It could very well be gas. There's a couple of different perspectives at this point in time, Tyler, but we haven't had the report yet. And we'll obviously go through that in detail and try to make sure that we understand on a go-forward basis what additional steps we need to take to make sure that we preclude it from happening in the future. Maybe Brad, I think that we're...

One additional point there. It's the soil on top of a synthetic cap that slid down a slope, basically. So there was nothing exposed inside the landfill, no damage to the landfill itself, but it needed to be pulled down and then rebuilt.

Okay. No lingering cost?

We don't believe so at this point in time. That's correct. We're doing more evaluation, Tyler. But at this point in time, we don't believe there'll be any additional costs or any additional work that we're going to need to do.

Okay. Okay, great. And then I got a few -- it's kind of another multi-part question on cash flow. So I think you mentioned that you only have $5 million slated for McKeen. So is that spend basically winding down at this point? Number two, there was a $6 million legal settlement payment that you're expecting in '24. What was that? And then three, when does the Southbridge and Potsdam remediation start to sunset? I know that's a multi-part question. I'm sorry about that. But those are the questions.

So in regards to McKean, we are nearly wrapped with this first phase. We've put in almost a mile worth of spur track switches, a gantry crane offload infrastructure to take off containerized solid waste and containerized soils and sludges. So we're building out the infrastructure to be able to turn on facility up to 5,000 tons a day to 6,000 tons a day. As I said earlier, we don't expect to ramp rapidly. This is long-term risk management for the Northeast, as we look at the risk of other sites potentially closing over time. We'll look to kind of slowly ramp this up. It's not going to be material in our numbers in 2024. The $5 million kind of stepping into '24 is just some of the remaining track work, a little bit more switch work, some of the heavy equipment showing up, articulated trucks with rail systems to take the containers up onto the working face of the landfill. So it's mainly wrapped up. If we were to ever invest to take construction demo waste at the landfill, we would have additional investments. At this point in time, it's not really in the near-term game plan for our strategy at the site. The $6 million charge that we took back in, I think, the second quarter or -- second quarter in relation to the fair labor standards action -- class action lawsuit, that money we expect to go out the door in the first quarter of 2024. And what happened here was there was a class action lawyer who contested that certain of our employees worked through their DOT mandated lunch breaks. We had clear policies, clear standards in the organization that, that wasn't supposed to ever happen. Our employees do truly need to take lunch breaks. But in retrospect, our documentation, our systems maybe weren't as great as they could have been for court of law. So we decided to settle with such attorney. And much of that money will go to our employees, our drivers, who were part of the class. So we've done a lot of introspection and change processes and procedures to ensure that our people truly are taking those breaks. And we have the right documentation placed into the future. So it's a culmination of...

Yes. And it's also -- Tyler, it's also consistent. The class action attorneys really have targeted the industry.

Yes. This is not a Casella one-off situation, John. You're right. So the Potsdam remediation is complete. There's some kind of continuous monitoring into the future. But that Superfund site was fully cleaned up. The other joint parties made investments as well. We're really at the end of that. Southbridge, you know, painfully, we've been working on the final closure approval with the state of Massachusetts for several of years now. The site's in great shape. We're ready to enter the post-closure phase. We've done vast majority of investment at the site to get it to that phase and we just haven't gotten that final regulatory approval and we're working hard to get that, Tyler.

Okay, great. Yes. Thank you so much. I know that was a multi-part question. Okay, I want to turn to New York. So I know you don't haul in New York, but I'm just curious if you have any thoughts on the recent zone awards there. Do you think that that impacts you at all? And I know that while you don't and you likely won't haul in that market, would it ever make sense to possibly open rail access transfer station in that market to maybe help clear some of those tons to McKeen?

Yes. So, New York City completed the waste zones and made the awards. And as you correctly point out, we do not directly participate in New York City. We have historically had some customers that transfer waste out of New York City to our landfills in upstate. And we continue to have some great customers in that market. We didn't enter -- it's not a market. It's a real focus for us. However, we will continue to work with some of the transfer stations that have won awards, and there may be some opportunity to rail waste to McKeen. Those awards were for 10 years with 10-year renewals at the discretion of New York City. And we do have one of the closest sites to the city with a lot of capacity. So it is a great opportunity for us.

I would only add, Tyler, when you look at that, I think 14 of the 20 franchises were awarded to interstate -- action interstate. And they have their own facilities and they're rail served. So it's very likely that a very large portion of that waste will go to their facilities. I think we will be -- we will have an opportunity as an alternative in terms of the overall disposal capacity in the city. And certainly, there are transfer stations that we're working with right now that will be able to continue into the future. But again, got to keep in mind that a good portion of that franchise waste is with interstate.

Yes, very interesting. My last one, it's kind of in the same vein. And you talked about it a little bit on the first question, but it does feel like rail capacity continues to ramp in the Northeast. Are you seeing any measurable impact on disposal pricing broadly?

Yes. Well, one of the things we've seen, I mentioned this with the one construction and demo debris site that's reaching end of life in Long Island, and also with some of the ramp-up in rail activity in the Northeast. It kind of ebbs and flows, right? So a site comes offline in the Northeast, there's a capacity crunch. Then some new capacity comes through, rail or other alternatives. You see a little bit of a tailing off of volumes, but frankly, that really hasn't impacted our view on pricing or maybe even other market participants because of the inflationary backdrop and just some of the complexity around new and emerging regulations and costs at site. So you see that a little bit with the volumes, as we said, with construction and demo right now. But it doesn't change our outlook on how we're going to run these sites for the long-term returns. We have to be laser-focused on 10-year returns at these sites.

No. Okay, perfect. Thank you guys so much for the time.

Thanks, Tyler.

Thanks, Tyler.

Thank you. [Operator Instructions] Our next question comes from the line of Michael E. Hoffman from Stifel. Your line is open.

Hey, gang. How are you doing up there?

Good, Michael. How are you?

Can't complain. Although we're going to get the snowstorm that you were supposedly going to get now, which could you take it?

No. That's not good. We're much more prepared to take that snow than you are down there for sure.

So if we could dig into -- I'd like to talk about volume from a perspective of good volume versus bad volume and purposeful shedding. And good volume to me is MSW, small container business, large container permanent versus bad volume is low quality margins. How do you frame your outlook about those trends? Because I think that's a better story than we might be negative volume in the aggregate.

Yes. That's a great point, Michael. I mean, we didn't get too much into the lease and Brad mentioned it where if you look at our volume decline in the fourth quarter, it really was highlighted in two areas, construction and demo debris at the landfills that we just discussed. And then on the hauling side, it was a little bit of roll-off on the C&D side and a little bit of residential work. And when we look at that, it was some of our lower margin work, especially on the residential side, we've been laser-focused on making sure we have the right customers, right price. Labor has been a challenge the last couple of years, truck availability. So we're really focused on making sure we get the right return on each stock we have. So some of its purposeful shedding. We're trying to get customer segments up to a certain margin point, and we're not willing to accept lower than that. On the construction and demo side, probably a little bit of slowing into the fourth quarter. We always see that, I think in the Northeast a little bit more slowing there than maybe some other parts of the country. Starting out 2024 in a pretty solid area in that regard, nothing with further sequential declines.

Okay. So the other part of volume and tying it to Tyler's rail commentary. Two big competitors on the collection side moved a lot of volume out of the market away from the burners in the fourth quarter. And there was a temporary impact to spot prices as the burners scrambled to fill, because their -- basically their volume is an airplane seat. If they don't get it, they can't backfill it? What is the state of the spot market today? My impression, our surveys say the spot markets recovered that they figured this out even in the seasonally week period. And that's another statement about the quality of underlying unit pricing in the disposal market, regardless of volumes.

Yes. So, we don't take a lot of tons at our landfills per se by spot price. We definitely have pretty long-term strategic relationships with various haulers, or we have our own flows of waste, but we take advantage on the other side. We do a lot of work with the burn plants in the Northeast, and we've been able to renew some great contracts across our footprint and also take advantage of some of those lower spot prices. And we'll always be in the camp of if we can bring waste at the right price point to a third-party site and maybe take advantage of a price point like that save our long-term landfill capacity for later, we'll make that decision. We -- there's so much tension long term.

Historically also, Michael, as you know, we -- we're more than happy to fill that spot capacity and would enter into those agreements to fill that spot capacity for the incinerators in the wintertime. And we have a little bit of that ongoing. But it could be more significant in terms of our ability to help stabilize that through the course of the winter.

Yes, Brad had a number in his script. It's actually important there. So Brad, our average price per ton at the landfills was up, I think, close to 10%,10% in the quarter. So I mean, that just shows -- and that's the average across our tons going in and third party tons.

It's the function of how we're managing the disposal and the mix of wastes going in, right, so…

We're not lowering for spot pricing there.

Okay, that's good to know. And then I think we can all agree that probably inflation is going to end at a higher low than it was the prior 15 years. And none of that should frighten you because you can price. The more important comment and it's a question at the same time, there's no risk to unit prices and you can manage your underlying cost of inflation and you can price accordingly. So whether we stay with structurally higher, you're going to be able to price it through and there's no risk to unit price.

That's correct.

Okay. A - John Casella No risk.

No risk. And then just to be clear on the [Multiple Speakers]

Particularly, with our book of business -- particularly with our book of business, because of the small amount of municipal contracts that we have, we have the capability to offset inflation.

You have a high percent that is open market access to price.

Right.

And then the landfill liner failure is not a slope failure, like...

It was not a liner -- Michael, it was not a liner failure. So when you cap a facility, you put a cap over the top of the existing waste and then synthetic cap, and then on top of that goes the soils, and that's where the veneer failure was. It wasn't a failure of a liner. It was just simply a failure of the cap, the synthetic cap, the dirt over the synthetic cap slid.

Right. And just to be very clear [Multiple Speakers] yes, but there is a peer company out there that had a true slope failure, advanced disposal had one several years ago. This is not a slope failure, just to be clear for everybody, it's not disrupting revenue, blah, blah, blah. Okay.

No, not at all. Didn't disrupt the operations of the facility.

Okay.

And there was no action from a regulatory standpoint.

Okay. And then lastly, the New York City, I think we have to talk about that in two different types of waste. There's a commercial waste, which is what the franchising is about and then there's residential. What are you most sensitive to as an opportunity? Because I think that commercial volume pretty much had homes before they were franchised. And maybe there's a little bit movement, but for the most part, it all had a home where the residential volume seems like there's more opportunity to take advantage of where they want to move that.

Yes. As we've said before, I mean, we've had a number of commercial customers coming out of the city to our sites in New York for years, Michael, and those flows are pretty steady. And several of those partners have won contracts in this wave as well. So we don't see anything that's a major plus or minus here for Casella in our interactions. There's maybe a little bit of new rail capacity. It's getting looked at in the city. That could be an opportunity, but that's about it from our vantage point.

Okay. Thank you very much.

Thank you, Michael.

Thanks, Michael.

Thank you. [Operator Instructions] Our next question comes from the line of Adam Bubes from Goldman Sachs. Your line is open.

Hi. Thanks for taking my question. I think you mentioned the acquired businesses in 2023 have come in at slightly lower margin pre-synergies than the existing standalone business. Can you just elaborate that -- on that a little more? How much lower are margins coming in? And can you just update us on progress integrating Twin Bridges and GFL assets, any major surprises?

Yes. Hi, Michael, it's Brad. So I mentioned that they're coming in at a lower margin. I'm really talking a slightly lower margin to the tune of, I think it weighed 5 basis points on margins in the fourth quarter. So I think really we view this as very quickly an opportunity as we start to integrate the businesses, continue to integrate the businesses and capture the synergies. This will become a margin tailwind pretty quickly.

And I think the -- probably the most significant aspect of those transactions, both of them, GFL and Twin Bridges, no real surprises, Adam. We were able to -- I mean -- and the relationship that Ned has built with GFL and Jason, the entire team, the transition has gone well. Scott Earl, as Ned said earlier, is working with our folks to really rethink routing and do the things from an integration standpoint that we need to do as quickly as we can. So we're really excited about it. No surprises. If anything, the surprises are on the upside in terms of the participation from both companies and also from Scott in terms of looking at re-routing the opportunity to really create the value that Brad's talking about. That is going to be a tailwind for us shortly. Margins also were not a surprise for us either. So they were a little bit lower, but that's not a surprise either.

And then can you just talk about how much of the targeted synergies are you expecting to realize in 2024? So can you just help us understand the margin ramp of these assets from here?

Yes. So we had in the Mid-Atlantic about $8 million of synergies being recognized over three years, and we'll get about a third of that from thereabouts in the first year in the Mid-Atlantic and with Twin Bridges in the capital District, we had about $4 million of synergies recognized over three years, and we're probably tracking more to like 50% of that in the first year. We've had some really excellent progress on some early consolidations and we're feeling great about that. And probably a little upside there as well over the three-year period.

Yes. And that's baked into the margin expansion that's reflecting our guidance and kind of stepping back. If you add up the synergies for all the deals that were done last year, and I talked about the opportunity as we go forward, it's about 100 basis points in total over time. So we'll get some of that this year.

And during the GFL and Twin Bridges asset integration period, how are you thinking about the level of M&A you folks can sustain over the next 12 months? And how do higher interest rates change how you're thinking about funding M&A?

Well, let me take part of that for you, Adam. I think that from an integration standpoint, we couldn't be more happy with the Mid-Atlantic team that Kyle Larkin has put up. And keep in mind, he ran those assets for some of our competitors before coming on board with Casella. So he's built out an entire team for the Mid-Atlantic. The integration is going extremely well. Same thing with Twin Bridges, that's going extremely well as well. So I don't think that the integration of GFL or Twin Bridges is going to have any impact on us on a go -- I mean, 2024 from an M&A standpoint. We still have significant work to do from an integration standpoint. But from a practical standpoint, we have very significant opportunities for continued growth. We've been able to demonstrate the capabilities to integrate those businesses, very significant amount of M&A, and at the same time bring down lower our safety record, lower turnover. So I think that we did a lot of work over the last year, really looking at where are our weaknesses. We've approached most of those weaknesses. We've hired the people that we needed to in terms of some of the back office challenges of the growth that we've had. So we're pretty excited about where we sit and looking forward to 2024.

And on the interest rate side, Brad, you want to hop in, I mean, it's not a concern for us given.

Yes, we're over 75% fixed. So...

I think that -- the only thing that it does do is it may change how Ned looks at the financials and how we're looking at. It may have some impact in terms of how we're modeling acquisitions. Probably not. It probably has more of an impact in terms of creating more pressure on independents to sell their businesses.

Yes. And we've got close to $500 million of liquidity right now, both through cash. We've got $220 million of cash. We've got liquidity on our revolver. So we're in a really good position to put money to work for shareholders with positive returns. And to John's point, I mean, we've got a lot of work we're doing on integration. So it really causes you to look towards quality, strategic fit and everything that's in our near-term pipeline this year is super high quality. Great overlaps, great fit. We're excited about the near-term pipeline.

Yes. And I think that, quite honestly, Adam, we've stayed very disciplined in terms of making sure that it's a high quality acquisition to integrate into the company and you don't really hear much about the M&A that we pass on.

Great. I appreciate the color. Thanks so much.

You're welcome.

Thank you. And as of now, there's no one left in the queue. But we will take a brief pause for anyone to queue up. I'm showing no one in the queue. I'll turn it back to John Casella for any closing remarks.

Thanks everyone for joining us this morning. Hope you all have a great holiday weekend. Look forward to discussing our first quarter 2024 earnings in April. Thanks, everybody. Have a great day and a great holiday weekend. Thank you.

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Everyone have a great day.