Casella Waste Systems, Inc. (CWST) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and welcome to the virtual fireside with Casella Waste Management. [Operator Instructions] It is now my pleasure to turn the floor over to your host, Michael Hoffman. Sir, the floor is yours.

Thank you very much, operator. And I want to welcome the senior management of Casella. We have John Casella, who is the Chairman and CEO; Ned Coletta, who is the Chief Financial Officer; and Jason Mead, who is the Director of Finance. Thank you all 3 for participating and helping us to help the market understand how the solid waste business model is going to be just fine through all of this and what you can do to flex the model and yet still be responsive to society's needs through this crisis. So again, welcome for joining us.

Thanks, Michael.

Thanks, Michael. Thank you.

So how about if we set a tone very quickly for everybody and remind you -- the marketplace who Casella is in the solid waste space. So where you're concentrated, what your revenue mix looks like. So as we start to talk about what can garbage do broadly and then Casella specifically, we can put all that in perspective.

Sure. Happy to do that, Michael. I mean, obviously, we're operating across the northeast footprint. And I wonder if it might be just -- helpful just to start off with where we are with our employees to date and talk a little bit to that if that makes any sense.

Sure, by all means.

So. Yes, so I think that -- and the reason for that is that we are so far really blessed. We -- of 2,500 employees, we've got 22 people out right now that have symptoms, more cold-like symptoms and flu. We've had 36 people return to work after being -- having symptoms. We've had 1 person who's tested for COVID. We've got 52% of our people that are in offices working from home and about 99% of our employees are working without symptoms. So, as I said, we've been blessed. We're doing everything that we can to make sure that our people have the PPE that they need. We're fortunate to have -- I never thought that I'd be in a position where I'd actually be calling in markers for friends and colleagues for 40 years of being in business where hand sanitizer and wipes were the issue of the day. But we've managed to get all of that out to the field and to our facilities, to our maintenance facilities; hand wipe, hand sanitizer to our trucks. And we -- the whole team has done a great job of protecting our people. And obviously, we're in early rounds. We'll see how it goes for the rest of the month, but we're -- so far, as I said, we've been blessed. So from an operating standpoint, I think some of that has to do with the fact of where we do operate. We operate across the northeast, as many of you know, and we're in a lot of secondary/tertiary markets, probably 65%, 70% of our business is in secondary/tertiary markets. We do obviously operate in some major metropolitan markets, but the majority of our work is in secondary/tertiary markets. So when we look across the business model, the business mix; 75% solid waste, 5.8% recycling, 7.6% on the organics and 10.6% of customer solutions. And again, the platform that we have is one that is clearly conducive to where we are right now in terms of the northeast.

So when you think about the garbage business specifically, because the recycling, if we remind everybody, is really the -- it's -- predominantly, it's the sale of the commodity, if I remember correctly, that 5.8%. So when I think of...

Michael, actually, today, about 90 -- maybe about 80% of that segment is generated through processing fees. So if you flashback 5 years ago, 90% of our revenues were derived from commodity sale. But as you know, we've radically shifted our business model to where almost even on the third-party revenue basis, most of it is generated from processing fees today.

Okay. Well, so let's touch that for a second. Is there a need in your view to not operate MRF in light of some of the health-related concerns that might exist in picking it through trash, specifically picking through trash as opposed to the collection of trash, which is bagged in bins.

From a practical perspective, we've put the whole safety team. Our VP of safety has put in place best practices for all of the different positions in the company. So from a safety standpoint, Michael, the MRFs, the scale houses have got different requirements for protective equipment, gloves, et cetera, and where each position within the organization, we're following OSHU requirements. We're following CDC. Now some of those things may change. We're hearing -- as everything else is, weekly, hourly and daily and hourly in terms of the changes. So we'll have to step up those things, pay attention to it and maybe put more protective equipment in place on a go-forward. But to date, as I said, we've had 1 positive across 2,500 people, and that's across the entire organization, both recycling facilities as well as hauling companies.

Yes. And I think from our standpoint, when we first -- this crisis first started to emerge, we first looked to the Department of Homeland Security, where the industry was defined as a Critical Infrastructure Industry. And then we started to speak to governors in each state where we've been defined to be an Essential Service Provider. And John spoke into the governor's offices or even some of the governors, and we've sent them memos. And one of the items we've addressed in that memo was there may be a need at some point to divert some of the recycling from the processing facilities. Our stance at this point in time is we're going to continue to operate. But if the facts on the ground change and we need to keep our people safe, we will do so. And as John said, we have personal protective equipment and new operating procedures for our people. And we've really kind of thought through that whole chain of events. But at this point in time, we're still recycling, it's still the law across the states where we are. And if that changes, then we'll change. We've also kind of worked through the contingency of what if someone gets infected at MRF, what do we need to do at that point in time. We've contracted industrial cleaning company, we put cleaning procedures in place. And we have a first response team that can mobilize between various operations to help make sure we service our customers. But as John said a second ago, the facts on the ground changed daily, weekly right now, so we're trying to be hourly.

Hourly.

Hourly.

And I think even the other thing that's important too, Michael, from a recycling facility perspective, our orders have been taken for April. So the export market is still there. We're seeing a little bit of positive in terms of fiber pricing, a little bit of negative with regard to plastic pricing. So HDPE, PET, because of oil pricing is down a little bit. Fiber pricing is a little bit stronger.

Very good. Switching over then to the garbage business.

Again, I mean -- I'm sorry, as Ned said before, that's where we are for April. I don't know what -- no one knows what May is going to bring.

Yes, we're taking this 1 day at a time. I think we can all agree that 2Q will be very different than you thought it was going to be when you started the year. And the question is, when does this start to look normal again. But let's talk about the garbage, the solid waste side of it and sort of for your company, parse it in between collection and disposal, and then talk a little bit about the mix inside collection and what you're seeing as far as changes in the business model as a result of what's happened so far?

Yes. So we put out an 8-K yesterday morning. Actually, we put out an amended 8-K. We had a few questions about one of the comments we put in there, where we're talking about some of the revenue changes we're seeing real time. And they were not meant to be historical metrics, but they are meant to be -- this is real time, some of the changes we're seeing that we could expect in the future. And there's a great table on that presentation on Slide 6, that breaks down our revenues on a third-party basis, both across the entire business and then within collection. And in our collection business, it makes up about 50% of our revenues today. 39.5% of that's residential collection, with 3 quarters of that being subscription residential directly with the homeowner, 1/4 of that being municipal. Our commercial collection is right around 35% and our roll-offs around 25%. And roll-off really has 2 segments. It's a type of truck we use to collect those boxes, 1/2 of that roughly is temporary construction roll-off, and 1/2 of that is permanent industrial customers. And one of -- as we start to prepare for COVID 3, 4 weeks ago we got really, really focused, of course, on the operating side to make sure we had contingency plans in place to continue to operate. On the back office, same thing, getting people out of the office. Lot of groups aren't used to working at home. We had to get up and going, like customer care, credit collections, accounts payable. We've got many of those people home. We're running effectively. Our IT team was able to scale resources. So we're doing well. But one of the key things I said to the team was we need data visibility. So how do we track on a daily basis what's happening with our workforce, as John started off by talking about to make sure we understood where there were potential issues that could emerge. Another is on the revenue side. We've built a code into our billing system, that code says COVID. And any time a service level change occurs, we track that real time daily. And we're not holding customers strictly to terms. If a small business calls in and says "I've been shut down due to COVID," can you reduce my service? Or can you suspend it temporarily? We're saying sure, let's do that. We put the code in the system. We now have visibility as to what our revenues are changing on a run rate basis. We're also able to scale costs more effectively by doing that. We're not sending a truck out to that customer to service them. We're scaling back variable cost. And frankly, we're doing the right thing also. In a crisis like this, we -- loyalty is a 2-way street, and we're trying to be constructive with our customers through this crisis. So where we sit today, and we put this out in the 8-K. Actually, where we sit on Tuesday evening -- so what day was Tuesday? Was that the 31st, we pulled data that day. And we had service level reduction of $1.2 million per month in our collection line of business. So what this means is, a customer called in, reduced their service, and whatever that delta is between the service they're running at before and what they're running at today, you add all of that up, it will be $1.2 million. So you take that into the month of April; however, many months into the future, that could be the impact. And we said, if you just annualize this number for 12 months, it will be about 4% impact on collection revenues if you were to take that out 12 months.

And when you think about the service on holds that have occurred, the majority of that would be commercial and then some temp roll-off and some permanent roll-off? How do I think about where it's coming?

Yes. So within that number, it's really only 2 categories right now. It's commercial and perm roll-off. Any temporary roll-off is a bit harder to see. I mean, we -- in the northeast, this is the time of year where things start to scale for us from a construction and demo standpoint on temp roll-off for collection. And also at the landfills, we start to scale. And we've seen a slight break to that normal trend. And normal, I use loosely because every year is a little different. But we're running about 5% lower on poles and about 5% lower on landfill tons over the last couple of weeks to what we would expect. And that, of course, could get worse. So the $1.2 million per month of lower revenues is associated with direct reductions for commercial or perm roll-off customers, not those other slices.

And given that you've done this real time analysis, if we could parse this a little bit further, if it's possible, is it more commercial than it is perm?

Yes. On -- some of that perm customers we have are doing great, like a really important segment there is grocery stores. That shows up in permanent compactors, and they're doing really well. And then if you look through our industrial segment, we've got some great relationships with companies who are even on the frontline of COVID working on new drugs or working on protective equipment and you name it, that their segments are increasing at this point in time. And I haven't netted any of that. It's too early to understand. But it's not all negative news. I mean, there are some areas in the book of business where you have people scrambling to get more waste service in place.

So one of the areas that might see more volume would be residential, if we're all at home. Theoretically, we may be throwing more trash away. I assume if you have 3 quarters of that residential subscription, you can come back at that customer and adjust the monthly rate to account for, you've picked more volume up.

That's absolutely true, Michael. I mean, I think that that's one of the benefits of the subscription service. They've got a container. And when the container is overflowing, then they're going to -- automatically, they would get charged extra for anything outside of the container. I think the challenge to that comment, though, in all fairness, is in some cases the containers may not be full. So the -- that charge wouldn't happen. We may be picking up a bit more waste until the container gets full because not every one of them would be completely full. So there may be a little bit of drag there, but you're absolutely right. The subscription residential service allows us to charge for extra.

And the point of it being is the municipal side, you have less flexibility on that. So unless the community is working with you on a municipal contract, you're bearing the brunt of that.

Yes and no. So one thing we've tried to do over the last 5 years is look at where we have risk in our business, of course. And as we enter into municipal contracts, two of the larger areas of risk in the Northeast have been recycling commodity prices and disposal prices. So we've effectively worked with new municipal contracts to pass all commodity pricing risk back to that customer. We, of course, share in the upside. But on the disposal side, many times where these municipal contracts are, we may not have the closest landfill or disposal site. So we often work to pass disposal pricing risk and sometimes just all disposal volume risk back to the community. They might pay for that separately in our hauling contract. That's not universally true, but it is true with the number of contracts, and it's an area -- we never thought of COVID, but we thought of the landfill disposal crunch in the northeast, and we tried to manage that risk through our portfolio.

Okay. So the good news is, and this is where I was going with this broadly is talking about how much of the costs are really variable in the short-term and what you can flex. And how much overtime might exist in the model that can come out of the model, which you also disclosed in your 8-K filing, I think. Is this -- just sort of sharing what you can do quickly and how nimble can you be as a garbage company? Help everybody understand that the industry and the Casella are far more nimble than they might be perceived.

Yes. And on Slide 8 of our presentation, we gave some statistics here on what the variable costs are in each of our segments and specifically what some of the first levers what we would pull. And on the collection line of business, for instance, we have over 60% variable cost. Some of that stuff doesn't just come out on day 1. Now, it's a little bit harder to do, and it might take months to fully ramp down, park trucks, reroute. Taking that much cost out would contemplate workforce reductions and the like. In the near term, though, we've got some easier things we're working on. I don't want to say easy. Nothing in this crisis is easy, but over time. Last year, in 2019, we had $19.7 million of overtime. And as you know, in the industry, we're all struggling to get drivers, mechanics, you name it, so our people who are working a lot of extra hours. And right now, we're working with each of our operating divisions to try and pull overtime out as fast as we can and scale routes and scale hours to appropriate level of work. There's also a lot of variable G&A that's in our model. As of 2019, we had $18.4 million of what I call variable G&A, and it added up from cash bonuses to managers. We've shifted 75% of our stock as granting a performance share unit with long-term goals. We've got T&E, we've got meetings, things like that rolling through that number. So these are 2 areas as we see revenues tail off and EBITDA and operating income tail off. These will be the first levers, then you'll start to move to other levers with variable costs through the business.

Okay. And why nobody, I think, had expected someone to do this on day 1? You are talking about weeks, not months, to be able to pull off a lot of this repositioning as the business changes.

We're absolutely talking about weeks, not months. We're looking at overtime costs on a daily basis. We're looking at on a division-by-division basis, where Ed is reaching out to all the division managers. We're looking at how much overtime we have currently. We're forcing the divisions to spread it out and do what's necessary to eliminate all of the overtime that we can right now. So the levers are there to be pulled. And if we get to the point where we have to, then we'll either furlough or lay people off and park the trucks. I mean, I think that we're ways away from that. I think the one thing that we do have going for us is that we fill the seats with the efforts that we've made over the last 2 years to fill the driver seats. We've got the programs in place that we think that we can replace drivers. We can attract drivers. We've demonstrated that to ourselves with changing our age from 21 to 18 so that we can attract as many young people coming out of high school who're not going on to college, and it represents about 35% of the kids coming out of high school. So we're confident that we can fill the seats if we need to. We're not there at this point in time, but we've got a lot of work that we can do and costs that we can take out before we have to pull that kind of lever. But it's certainly possible, and it's certainly something that we're thinking through now. And as we look at where we sit on a daily, weekly basis, will be -- that will lend itself to how much of a lever we're going to -- how many levers we're going to pull.

Okay. The other item that I would touch on is capital spending. And sort of understanding what the industry can do and you, specifically, Casella, can do relative to capital spending. If you're spending 10% to 12% of revenues, how much of that really can be walked back on a practical basis and do no harm to the business in doing so in the short term?

So short-term, it's tough when it happens this time of year because we've already placed truck orders. We've received a number of trucks for our fiscal year plan. We've put orders in for heavy equipment. And with landfill construction projects in the Northeast, we're doing them typically from May or June through the early fall, and these plans get approved by regulators. And they take months to approve in many cases. So what we've done is we've frozen other categories of what we call discretionary CapEx. There are things we do long-term, but say, paving parking lots or upgrading the locker room. 10% percent...

10% percent of our overall capital budget.

Yes. And we're looking at some of the other categories to see if we can do more. If you're looking out 6 months from now or a year from now, there's other levers you could pull, you could build smaller landfill cells. You could -- if you're not utilizing your fleet as much, you would not order as many trucks. New containers is an area we're cutting back right now where with some of the service level reductions and not as many new sales, we're not putting as many containers on the street. So there's some great flexibility there. But in the near term, it's about $10 million, as John said, 10%.

I think that one of the things that's important to really think through is the fact that the supply and demand equation in the northeast isn't going to change in terms of disposal capacity. So we believe that we need to build that disposal capacity. And unless we see significant volume contraction from a disposal standpoint, we've got to stay on track and build disposal capacity because we're going to have the opportunity to price and to get the volume into the facilities, just simply because of the supply and demand equation. If that changes, then obviously, we can change the plan.

Right. And when I think about a little over $100 million that's in the budget, if I recollect correctly, a little -- more than half of it is related to the disposal side of the business.

It is. Yes.

Correct.

Right. So that -- so if, in fact, this is either prolonged or deeper volume number, you can flex that down and lengthen the replacement cycle.

Yes, what you do essentially is we have a lot of sites that balance against each other, where trucks could be redirected that are going to, say, 5 different sites they could go to 4 different sites, you would not build at that fifth site and then preserve that capacity for later. What we've seen in the volume trends doesn't suggest that that's a huge option at this point in time. But as we've said, this is really changing day-by-day, week-by-week. And with so many short-term place orders and the changes that happened over the last 10 days, we're really trying to understand more of what that's going to do to landfill volumes over the coming couple of months.

Okay. And then one item I did want to circle back on just to remind everybody, you live in a part of the country where weather can be disruptive. If you get a winter storm -- just to put in perspective the 5% volume decline at the landfill, when you get a winter storm, you can have a volume disruption that's pretty healthy. Can you sort of share that so people understand what that 4% on sales and 5% at the landfill are actually relatively modest, mild numbers?

Yes, it's interesting. So, I joke with Jason. We call him the weather man. Because for years, we used to study what happened with snow events. So, you get a blizzard event, and people don't leave their homes, they don't go to restaurants, they don't go out shopping, businesses slow activity. And we typically will see with a blizzard, which is a 1- to 2-day event, a 10% drop in landfill volumes. And then within the next week, we get about half of that back. So there'll be 5% lower economic activity over a 2-day period of time that never actually comes back. And it's much different in a certain way than what we're seeing today because you're fundamentally seeing businesses fully shutter and there's going to be a lot of knock-on consequences from that. But it's an interesting data point where you do see lower tonnages. Within that model, that's never really hurt us before because we're managing against permits on an annual basis and ability to find other tons. Within this crisis, there could be a multi-month long period of time, where we have lower volumes at those sites and we don't maximize annual permits. So I think it's interesting because you see the businesses shut off in much the same way for that period in time, but this, of course, will progress in a more significant manner.

I think the other thing, too, that's important to remember is that we handle most of the ski business across Vermont, New Hampshire, Maine and upstate New York. And that business normally shuts down the -- probably the first week of April towards the middle of April. And the ancillary businesses, commercial businesses around it shutdown, restaurants, hotels, motels, everything shuts down. Well, shuts down for at least a couple of months, and probably sometime in the July time frame, the end of June, you'll see some of that come back for some summer business. But fundamentally, we're -- what we saw this year is those ski areas all closed probably about 3 weeks early. So that's a normal cycle that we're going to see. And obviously, we're already seeing more than that. But that's just part of our normal cycle, though.

Okay. Let's talk about the balance sheet very quickly because the marketplace is sort of checking everybody's leverage exposure, liquidity, and I think you all have a good story to tell here, but let's put that in perspective for everyone.

Yes. So it's really a big positive for us right now. We ended 12/31/19 at 3.07x total debt-to-EBITDA against March 31 -- our March 31 covenant will be 4.0x. So we've got plenty of headroom to our leverage covenant. We had $152 million of liquidity at 12/31/19. Our next major debt maturity is our Senior Secured Credit Facility in May of 2023. So where we sit today, we're definitely in a mode where we're working to preserve cash, as we said a minute ago, freezing discretionary CapEx, trying to make smart decisions to ramp down variable costs. But we believe on the backside of this crisis that there may be some enhanced M&A opportunities. So we really want to make sure we have the liquidity in place to meet our needs over the coming months, which we absolutely believe we're in a great position to do so, but also save some dry powder as we exit this.

Yes. I mean, I think that, as you know, and probably many folks know from an acquisition standpoint, the independents have really felt a tremendous amount of pressure from a labor cost standpoint, if they could fill the positions of -- driver positions, the mechanic positions that they had opened. They've seen tremendous inflation with disposal. And obviously, just tremendous disruption from a recycling standpoint in terms of the value. And now add this to the equation, it's our belief that our pipeline is strong. It's going to continue to be probably even stronger.

And I suspect there's a slight pause because you want to know what EBITDA you're going to end up owning when we're done. But even that said, I could see where tuck-ins might just progress, the one-two truck thing at a normal pace and maybe chunkier things with 5 -- $15 million in revenue might be a little slower at the moment.

I think that's a fair perspective, Michael. I think that we're staying in contact with all the folks in the pipeline because you can pick up the phone and call people, you don't necessarily need to get in front of them. But it will drag a couple of weeks because you're not likely to, in the middle of this in terms of what people think is going to be the height of it, be going face-to-face and doing those things. You may with some, but in all likelihood, there's going to be a little bit of a pause.

And with the smaller businesses, we know how they would fit with our assets as well. And there are things that have been on our radar. So I don't think you'd need to wait like 6 months later to see a new run rate of business. I think you can understand as well how -- where those synergies will come from and how much you really like something as well. So we've really instructed our team that that's an area of focus as we're working through this; keep our people safe, keep our customers serviced and then keep close with businesses we may want to acquire over time.

Okay. So now I'm going to ask a question that's hard to answer, but I want to put it in -- I'm going to frame it with an assumption that we are allowed to go back to some sense of normalcy as a country. And so geographically, in the northeast, by some June-ish, so that the second half of the year, all things being equal, we can be normal. Now the speed at which that happens is open for question. But from a garbage company's perspective, all of the service on hold work, if those customers come back, what happens in your business model? Hope everybody understand on the backside of this because it will end. What happens?

Well, from a practical standpoint, everybody starts back up again. We're not pulling out containers. Our -- all of our commercial assets are being left at our customers, unless they specifically ask us to take it, but for the most part they won't. So all the assets are being left there. We're reducing service. So we will just start ramping back up service. And slowly, over time, and it will be -- it's just a function of how quickly everything comes back at restaurants and hotels and motels and all of the economic activity that we've just lost. But the assets are there, we're going to try to keep those customers. Even if we're only servicing it once a month, we're going to keep the asset in place just to start back up again.

And just so -- you've done this fascinating study where you put the COVID account -- the code in and be able to measure this $1.2 million revenue. It literally -- all of them survive because there is a sad aspect that maybe that doesn't happen. But all of them survive, and on July 1, they all said, we're back open that number literally walks right back in theory, right? I mean it just...

Yes.

In theory.

That's -- and so that's the important message. There's a -- once normal happens, every one of these customers has to have a garbage service. And as they turn it on, you're back at it.

Yes.

And then the question is how quickly do -- are they able to ramp their business? How quickly does the economy come back? And...

And -- but there is one element that you maybe do lose during the year to what I said earlier, where landfills or with roll-off poles or construction, that work -- on what we studied with blizzards has shown it doesn't get made up later. You just have a blank spot, right? So if a construction project gets paused for 4 months and then starts back up, those same workers can't work 2 projects at once later, right? So you have this blank spot. So you might get that stuff ramp back up, but you could have a period of lower tons, a little bit lower activity on the roll-off side.

Fair enough. But I think we can all agree that 2Q is going to be shocking all and ugly. And potentially, if we're all back to some semblance of normal in the second half, there's -- there will be a clear demarcation.

Yes. And one of our goals with putting our 8-K out the other day wasn't to guide or to set an expectation for Q2 or for the year. It was just to get some information on what we're doing to manage through this crisis as a team and what some of the real time impacts we're feeling in our business because I would hate to kind of model out fully Q2 at this point in time. We all need more data. Hopefully, by the time we announce our earnings on May 7 and May 8, we'll have some more data. We'll have closed April. We'll have closed March of course. We'll have a little bit more data at that point in time to share with you and our investors.

Very good. Why don't we open up for questions then? Operator, could we see if the line has any questions?

[Operator Instructions] Your first question is coming from [ Robert Stone ]. Your line is live. Rob your line is live, go ahead. Yes, go ahead. You can ask your question. Your next question is coming from [ Scott Holland ].

Hey, can you guys hear me?

Yes. Hey, Scott.

Just a follow-up question on the ski areas and surrounding communities and the colleges. Do you have any idea what percent of the business those 2 specific areas might be?

Yes, I don't really want to get too far into the weeds, so on that, where John's comment is really powerful one, where some of that stuff is going to naturally ebb off as well. But we do have other seasonal businesses that come on in May and June. So I think it's more a matter of -- that's what we've seen the reduction is...

I mean -- and fair enough, I mean, we have not isolated those businesses and looked at it that way. It's probably something that we should take a look at and see how much commercial business is around each of the ski areas and what that specific...

It's a little tricky. So we we've been taking like a geographic radius around each of those. And I don't have all of that figured out yet.

I know.

Okay. Okay. Well, maybe just a follow-up on that in a week or two. The second question is on the M&A, just given your debt position and whatnot, I assume you would not want to be pulling the trigger on some of these acquisitions until you see exactly what volumes we really get here for the next couple of quarters. Is that fair?

I think it is fair. I think, as Michael said, something that's a very small tuck-in that just is around $1 million or less. Those are the kinds of transactions that we'll probably do. I don't think that we have -- we don't have anything planned at this point in time, anything large planned at this point in time.

We had a couple of small ones in the pipeline that were right on the precipice of getting done, and they're very good fits for strategies in a few markets. So we're just going to -- we're just getting those done. But to your point earlier, there's really a pause for 3, 4, 6 months. It's hard to know at this moment in time. But on the back side of that, we are pretty excited about the prospects.

Hopefully, it's a pause for a month.

Yes.

Not 6 months. Hopefully, only 30 days a max.

Yes, we don't really know that yet. You're right.

I know we don't know that. But I mean...

Let's say a month.

Your next question is coming from [ David Peterman. ]

Good morning. Michael, John, Ned and Jason, great conversation. My question is, we're beginning to hear from a couple of companies and a couple of local governments that they are concerned about running out of things like hand sanitizer and gloves and other PPE as this continues. Is Casella experiencing any of that? And if not, how are you guys keeping your supply chain to receive those potential materials?

You know I said -- were you on in the beginning of the conversation, David?

I don't think I was. I joined late.

Well, we started off with talking about how blessed we were because we've only had 1 employee test positive. I've spent -- I was saying that I never thought that I would be reaching out to friends and colleagues in pulling in markers to get hand sanitizer and hand wipes. But we're fortunate. We've been able to get to our facilities -- hand wipes to all of the facilities. We've been able to get hand sanitizers to all the trucks. We're -- we've just been very fortunate to be able to do that. We also had a significant amount of masks in stock as well before this happened. Primarily dust masks that were being used in the recycling facilities, and now we're obviously using them in scale houses, et cetera, et cetera. And we're working on some additional things right now from a mass perspective, there are some other ideas that we have that we think are going to play nicely. But we also have a fairly significant stockpile of masks, thousands of masks. So we're in pretty good shape in that regard. It is very difficult to get anything. I've had to lean on friends and colleagues that I've known in business for 40 years, distribution companies, safety companies, and we've been able to get what we needed to.

You've even had a distillery -- had a distillery hand sanitizer.

Yes, we've had a distillery in Vermont that has done 1,500 bottles of hand sanitizer that we were able to put in the trucks. So we've been fortunate in that regard, but we're not -- now we're not experiencing any less difficulties than anyone else locating material, but so far we've been able to deliver for our people. It's one of the most important things that we can do as a management team, is to get that job done. And we got to get that job done in order to be in a position to keep our people safe.

And one other area on that topic, a month ago, my CIO gave me a call and said if this starts to break we need to have a lot more computer hardware to get our people working remote. Our customer care agents and others are used to sitting in our office. So that week, we went out and got a lot of laptops and other computers and mobile equipment, headsets, you name it, and we've been able to very rationally move our workforce in the back office to work at home. And so we haven't had a crisis there either on the IT side because we're just really thoughtful and early in our actions.

And I think that where we are today is, it just has to be said, no one knows where we're going to be 2 days from now. What we do know now is that we've done everything that we can to put the right protection in place, but as you know, if you listen to the CDC, it's changing weekly, hourly, daily in terms of what their thinking is in terms of best practices. So we've got to keep up with that. We've got a call with our management team once a week, where we go through everything. Our safety department is put together by position in the company, the requirements for PPE. So, I mean, we've done everything that we can. But it doesn't mean that we're not going to have an issue with a big facility. We could, as could anyone else, but we're doing everything we can to avoid it.

There are no further calls in queue at this time.

Terrific. And I want to thank all of you, John, Ned, Jason, for participating this on Friday. Stay safe, your families and your colleagues and employees, and we look forward to talking to you in about a month around earnings.

Sounds good, Michael. Thank you very much.

You as well. And for everyone on the call.

Yes, stay safe, everybody.

Thank you.

Thank you, ladies and gentlemen. This does conclude today's conference call. You may disconnect your phone lines at this time, and have a wonderful day. Thank you for your participation.