The waste and recycling industry is an ever-evolving industry, and as the industry changes, Waste Pro USA Inc. Chairman and CEO John Jennings makes the moves necessary to ensure that Waste Pro remains one of the top players in the game.
“My blood runs green in the industry, and I work hard to ensure that we are an active member of every community that we service and that we provide services that our customers really want,” says Jennings. "One of the things that we’ve always strived for is to be the distinguishable difference in this industry, and I can confidently say now that we are. We accept and relish our role as a disruptor in the industry, and we provide better documented service than any of the larger companies can provide. We have developed a strong brand and culture, and that has helped us expand our footprint over the years.”
Early in his career, Jennings worked as a trader/analyst on the New York Stock Exchange, investing in a number of different industries and businesses. But once he stumbled across a friend in need, Jennings put aside his work on the New York Stock Exchange to take over a small waste and recycling company in Florida.
Shortly after taking over the company and transforming it into Jennings Environmental Services, he formed a friendship with John Drury, the now former president of Browning-Ferris Industries (BFI). Drury ended up leaving his position at BFI to work at USA Waste Services, and Jennings sold his company to USA Waste, which later acquired Waste Management.
Jennings worked under Waste Management and gained ample experience, which he used to later form Waste Pro in 2001.
Waste360 spoke with Jennings about how he got his start in the industry, some of the best practices he’s learned throughout his career, Waste Pro’s financial and growth highlights from 2016 and the first quarter of 2017, the company’s acquisition plans going forward and the benefits that Waste Pro has seen since switching its fleet over to CNG.
Waste360: Prior to launching Waste Pro in 2001, you established your first waste collection company in 1973, where you served as the CEO of the largest privately owned waste disposal company in central Florida. Tell us about that and how the company eventually merged with USA Waste Services and acquired Waste Management.
John Jennings: During my time working on Wall Street, I made a couple of investments in Florida. I was in Orlando, one day checking on some of my investments when I noticed a garbage truck dumping a container at a business on the corner, and I knew that something was wrong. I pulled over, and I happened to recognize the driver, who was a supervisor at a company in Long Island, N.Y., that I had worked at during college. I started talking to him, and he explained that he was having problems with the banks understanding why he needed a loan for containers for his commercial waste business. After hearing him out, I decided to loan him $40,000 so that he could get the containers he needed to grow his business.
After about a year, he came to me and explained that he wouldn’t be able to pay me back because he couldn’t compete in the industry due to a large public company putting pressure on him and his business. I told him I would look over the finances, and I did. I found that he had payment books for his two trucks, containers and a handful of other things so instead of having him file for bankruptcy, I took over his debt and began my career in the waste and recycling industry.
I truly started in the industry at the ground level. In the early days of taking over the business, I would get up early in the morning and go out on the trucks with the drivers to see firsthand the services we were providing. Eventually, I improved the business and transformed the company into Jennings Environmental Services, which became the largest private company in central Florida.
Shortly after Jennings Environmental Services was born, I met John Drury, and we ended up establishing a tremendous relationship. He eventually left BFI to become the chairman of the board and the CEO of USA Waste Services, and once he joined USA Waste, I sold Jennings Environmental Waste to USA Waste as its first-tier subsidiary. After that, USA Waste purchased Waste Management and decided to keep the name Waste Management because most of the contracts acquired were in the company’s name.
After a couple years, I started to notice a detachment from local communities and people we were servicing, and I decided that I wanted to launch a new company with more personal service offerings. And that’s how the idea of Waste Pro came to be.
Waste360: At USA Waste Services, you worked as the regional vice president for the Florida and Caribbean division, where you oversaw more than 160 municipal contracts that served 1.8 million residencies and 20,000 commercial enterprises. What best practices did you learn in that role and how do you apply those best practices to your current role at Waste Pro?
John Jennings: My father, who worked in the industry for many years, taught me that the waste and recycling industry is a relationship industry. And he is absolutely correct.
Even though I am involved in the waste and recycling industry, I have maintained investments in a number of other industries like community banking. When I started my first community bank, the chairman and CEO was taken back when I told him that a successful bank is just like a garbage company because it’s based on relationships. Banks want good customers who are happy and pay their bills, and so do waste and recycling companies.
When I had the opportunity to be the regional vice president for Florida and the Caribbean, I noticed that Florida was really an area that public companies were turning to for market share, and in order to win over customers, they were cutting prices. But those low prices were actually forcing companies to make tough decisions like reducing truck maintenance and supervisors on routes to maintain their bottom line. All in all, they were providing poor services to customers.
Those decisions made by other companies worked to our advantage because we were offering top services at a competitive price. We eventually reached a point where John Drury was able to approach the Waste Management board of directors and gain support from several financial investors to takeover Waste Management. That foundation is the same foundation of what Waste Pro is today.
Waste Pro really started because John Drury got sick as a young man, and within a short time period after acquiring Waste Management, he passed away and a lot of the spark was taken out of the business for me. I announced my retirement after his passing, but the seven vice presidents who I managed told me not to retire and we formed Waste Pro. At Waste Pro, it’s important to me that I pass along everything that Drury taught me in my career so that others can progress the industry into the future.
Waste360: Tell us about some of the financial and growth highlights from 2016 and the first quarter of 2017 and some of the company’s goals for the rest of this year.
John Jennings: Last year, the city of Germantown, Tenn., a very upscale city, was having service problems with its collection vendor so we submitted a proposal that was actually 100 percent higher in price than the city’s existing service provider. The city did its due diligence and eventually selected us as the new service provider.
When the city made its decision, a lot of people asked why the city opted for the most expensive company, and the mayor responded to them by saying that “you get what you pay for.” That is also how we feel about things. We work hard to ensure that we are providing the best services possible in every community that we serve.
After our first year servicing Germantown, the city did a survey on our services and our service acceptance was 77 percent higher than other haulers’ service acceptance percentage in previous years. We are capable of retaining a much higher percentage than other companies in this industry, and we have had a more than 20 percent compounds growth rate since we were born in 2001.
On the financial side of things, we closed out 2016 at $594 million, and we are now projecting well over $650 million for this year. We are continuing to grow, and we are expecting to see most of our big contracts come in at the end of this year.
In the first quarter of this year, we hit every record in terms of EBITDA, lowering our costs of sales, lowering our percentage of operating expenses, increasing our free cash flow both in terms of our budget and year over year growth, etc. April came in ahead of budget, and its trending in the same percentage that the first quarter is. Overall, we are expecting another positive outcome this year.
Waste360: Waste Pro has integrated a number of different technologies into its operations and fleet over the past few years. Tell us about how those technologies have helped improve various areas of the business.
John Jennings: Over the past couple of years, we have learned that 360-degree camera systems have a lot of value for everyone, our employees, the public, our municipalities, etc. In addition to boosting productivity levels and our services, camera systems also keep our staff and customers safe by enabling us to see who our risk drivers are so that we can address our concerns before an incident or injury happens.
When we first put the cameras in our fleet, the drivers were skeptical, but now they are starting to see the benefits they can provide. For example, some of our employees were involved in accidents, and they ended up proving that they weren’t in the wrong because of the footage that the cameras captured.
The cameras are now in about 99 percent of our vehicles, and because of these cameras, a lot of our employees have more confidence out on the road. Our employees understand that these cameras aren’t in place to get them in trouble and that they are there to help keep them and our customers safe.
At Waste Pro, we also reward those who go above and beyond to be safe. Our Safety Awards, which honor employees for their safety efforts and promote our safety culture, gives employees a chance to win $2,500 a year and an additional $10,000 every three years. Currently, we have a couple employees who are in line for their fourth $10,000 award, and that right there shows you how dedicated our employees are to safety.
Since beginning the award, our direct payments to our employees have gone up each year and our direct payments for accidents and workers’ compensation has done down each year. I expect to see improvements again this year, and I am really proud of what I’ve seen so far with this program.
Waste360: Switching to CNG trucks and developing fueling facilities has been part of Waste Pro’s fleet strategy in recent years. What percentage of the fleet is now CNG and what are some of the benefits the company has seen from making the switch to a CNG fleet.
John Jennings: Twenty-four percent of our fleet is CNG, and another 3 percent is some other type of alternative energy source; however, the predominate fuel source going forward will be CNG because it’s cleaner, American produced, has minimal odor and provides our employees with a smoother, quieter ride.
We are very happy with the switch, and we now have nine locations that are CNG facilities. At those facilities, we offer municipalities with the option of fueling their fleets so they don’t have to spend the capital to build their own sources for CNG. That concept has worked out well for us and the municipalities that we work with.
Waste360: Waste Pro is the first trash hauling company in Florida to power its regional headquarters with solar energy. Tell us a little about that.
John Jennings: The Sarasota, Fla., regional headquarters, which has 30 CNG stations and a single stream MRF onsite, has a LEED platinum certification. Half of the headquarters’ roof is made of solar panels, and the electricity that we generate is sold back to the grid. The entire facility is green and surrounded by trees, which are mandated by the county to remain as is and not be cut or removed because they are some of the oldest trees in the county. Between the MRF, CNG stations and headquarters, it’s really a total site.
Waste360: Within a 12-month period, Waste Pro completed 11 acquisitions and increased its service footprint by 33,000 customers. Tell us about the efforts that made that possible and some of the company’s acquisitions plans going forward.
John Jennings: We’re in a footprint that we’re very excited about; every state that we are in is part of the growth area of the U.S.
Over the years, we have garnered the respect of private companies by not cutting corners or acquiring them due to our financial power. We have always provided service at a level that should exist in the industry, and we will continue to do so going forward.
As a consequence of those actions, we often get approached by competitors in our service area to consider them for acquisitions. That method has worked very well for us, and even if we decide not to move forward with an acquisition, we communicate with the company and let them know the details of our decision.
Looking forward into the future, we are anticipating tremendous growth. We still have organic growth potential in our footprint, and that’s our main area of focus right now. We will look for expansion into other states as it dictates and as we’re approached by other companies that would like to become part of Waste Pro.
Waste360: Waste Pro is now the official waste and recycling partner for the New Orleans Saints and former Saints running back Deuce McAllister is the president of Waste Pro Louisiana. Tell us a little bit about that.
John Jennings: Our sponsorship with the Saints is terrific. They are a joy to work with, and they’re completely responsive to our ideas. They incorporate us in everything that they do, and we are happy to provide them with our services.
In addition to the Saints, we have a sponsorship with the MLS soccer team in Orlando, who just built a stadium with their own money. We were the second sponsor to sign on with them, and it has been a great experience so far.
As a company, it’s important for us to have these sponsorships because everything that we do is done with a purpose, and these sponsorships allow us to grow and create valuable relationships.
Waste360: Tell us about the new materials recovery facility (MRF) that opened in Manatee County, Fla.
John Jennings: We have been servicing Manatee County since 2008, and as part of our most recent renewal, we had to build a home for the single stream recyclables that we have been collecting. We started construction on the MRF last year and opened it this past January.
Since it opened, we have been hosting tours of the facility, educating people on recycling and our services. In May, the Manatee County Economic Development Council toured the MRF and asked if it could have its quarterly meeting at our facility. That was an exciting moment for us, especially since our facility is the first true single stream MRF in the county.
Waste360: Your father, Michael Jennings, worked as a garbage man in Long Island. Did his role in the industry have an impact on your decision to enter the waste and recycling industry?
John Jennings: I am always proud to say that I am a first-generation American and a second-generation garbage man; waste and recycling is in my blood. My father worked as a residential garbage man in New York for a long time, and the industry always had a draw to me because of that. I often say that the industry will attract certain people and the people who succeed in the industry will never leave the business because of the attraction.
Waste360: What are some of the biggest challenges that you have faced in your career and how did you overcome them?
John Jennings: My staff and I look at every challenge as an opportunity. When we first launched the company, we set quality goals and accomplishment goals before we set financial goals, and that helped position us in the areas that we wanted to be in.
I have been fortunate to have great people by my side since day one, and I work hard to encourage those talented people to go out and do something that we are all going to be proud of because we are better together.
Even though we have been around for quite a few years now, we still face challenges, and we still view those challenges as opportunities.
Waste360: Who are some of your mentors in the industry and how have they helped shape you to become the person you are today?
John Jennings: Throughout my career, I have met a number of helpful people, but John Drury has been my main mentor in this industry. I first met him when I was in my early 20s, and he took the time to give me guidance and set a model for me to follow. His grandson now works for Waste Pro and is one of our young leaders.
Mickey Flood, retired chairman and CEO of IESI, and Ralph Velocci, a dear friend and successful green environmentalist, have also been very influential for me over the years.
Waste360: What advice would you give to someone who is looking to have a career in the waste and recycling industry?
John Jennings: Find your passion. I believe that the passion in this industry is here because of the importance of waste and recycling. The environment is our future, everyone’s future. And if you’re passionate about the environment and your future, this industry is for you. In addition to that, enjoy every moment, and always be the person who looks back at you in the mirror.