TerraCycle US continued to rake in more money from companies paying it to operate mail-in recycling programs, but it incurred steeper losses doing the actual recycling of plastic and other materials.
Based in Trenton, N.J., TerraCycle US specializes in recycling difficult-to-recycle products and packaging. Much of what it handles is scrap plastic, particularly combinations of HDPE/PP and PET, along with some engineering-grade plastics.
According to its recently released 2021 financial report, the company reported total net sales of $33.5 million in 2021, up 36% over net sales in 2020. The company’s income (before income taxes) was $7.5 million, up 89% from the prior year.
But the higher numbers were driven by TerraCycle’s Sponsored Waste and Zero Waste Boxes programs, which enjoyed sales increases of 49% and 50%, respectively. In the Sponsored Waste program, brand owners pay TerraCycle to run mail-in recycling programs for their products, and in the Zero Waste Boxes program individual consumers or companies buy postage-paid boxes and mail in specific categories of materials for recycling.
In terms of the Material Sales division, which mostly sells recycled plastics, sales dropped by 28% and income worsened from a loss of $1.1 million in 2020 to a loss of $2.7 million in 2021.
Lastly, in the Regulated Waste division, which collects materials such as bulbs, batteries, e-scrap and medical waste and sends them to processors, revenue dropped slightly but income losses moderated last year.
The 2021 financials were a continuation of the prior-year’s trend. In 2020, the Sponsored Waste and Zero Waste Boxes revenues were up from 2019, but the Materials Sales and Regulated Waste division revenues were down.
The following are details on financial performance in each of by TerraCycle US’s revenue-generating business segments in 2021:
Sponsored Waste Programs: Brand owners pay TerraCycle US to establish and operate nationwide collection programs for those companies’ products and/or packaging.
- Net sales: $15.6 million
- Sales change from 2020: +49%
- Income (before taxes): $5.9 million
- Income change from 2020: +76%
Zero Waste Boxes: Consumers and businesses purchase postage-paid boxes and mail products to TerraCycle US for recycling.
- Net sales: $11.2 million
- Sales change from 2020: +50%
- Income (before taxes): $4.5 million
- Income change from 2020: +146%
Regulated Waste: This division helps consumers recycle streams such as fluorescent lamps, bulbs, batteries, scrap electronics, organic waste, medical waste and others.
- Net sales: $5.7 million
- Sales change from 2020: -6%
- Income (before taxes): Loss of $109,000
- Income change from 2020: Improvement from loss of $373,000
Material Sales: This division generates revenue by selling recovered commodities (mostly plastics) collected through the Sponsored Waste and Zero Waste Boxes programs to manufacturers. The recycled plastic pellets often go into plastic lumber or containers.
- Net sales: $1 million
- Sales change from 2020: -28%
- Income (before taxes): Loss of $2.7 million
- Income change from 2020: Worsened from loss of $1.1 million
As of Dec. 31, TerraCycle US has over 150 brand-sponsored national recycling programs in 48 states. The company currently sells Zero Waste boxes for over 90 categories of products and materials.
In terms of explanations for decreased revenue in the Materials Sales and Regulated Waste divisions, the report pointed to a “slower than expected recovery in 2021 from the impact of lockdown, closed offices and reduced economic activity in 2020 have had more of an effect on these segments.” Additionally, processing delays have shifted some of the expected 2021 Materials Sales revenue into 2022.
TerraCycle US disclosed that Procter & Gamble and Unilever were a couple of the company’s top customers for the Material Sales business in 2021.
In 2021, TerraCycle and several of its brand owner customers faced a lawsuit in California state court by activist group The Last Beach Cleanup alleging the companies were misleading consumers about the recyclability of products. The parties reached a settlement in November. Through the settlement, TerraCycle agreed to, among other steps, track the flow of its scrap materials to ensure they’re being recycled.
(TerraCycle US is a subsidiary of global company TerraCycle, Inc. The financial statements apply only to TerraCycle US. They were disclosed because the company sold stock to the public.)
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