TerraCycle US reports increase recycled material sales

TerraCycle US’s total sales surged last year, with a particular improvement in the sales of recycled plastics and other materials.

Meanwhile, the company in December bought a Chicago-area warehouse to aggregate and sort recovered materials, allowing it to shut down leased spaces and generate cost savings. 

According to an annual report filed May 1, TerraCycle US tallied $42 million in sales in 2022, up 26% from the prior year. The company’s income before taxes was $3.3 million, down 57% from 2021, however. 

“The Company’s financial performance has continued to be strong in 2022, in spite of the impact in our business of the COVID-19 global pandemic and the macro-economic pressures from rising inflation and looming possibility of a recession,” the filing states. 

The Trenton, N.J.-based company continues to make most of its money from brand owners that pay to have TerraCycle US operate mail-in recycling programs on their behalf, according to an annual report filed May 1. But last year brought a sharp uptick in TerraCycle US’s material recycling business. Sales in that segment rose nearly 247%, and income before taxes came in at $1 million, compared with a prior-year loss of $2.7 million. 

The following are details on financial performance in each of by TerraCycle US’s revenue-generating business segments in 2022:

Sponsored Waste Programs: Brand owners pay TerraCycle US to establish and operate nationwide collection programs for those companies’ products and/or packaging. As of the end of the year, TerraCycle has over 150 brands sponsoring national recycling programs in 48 states. 

• Net sales: $16.7 million
• Sales change from 2021: +7%
• Income (before taxes): $3.4 million
• Income change from 2021: -42%

Zero Waste Boxes: Consumers and businesses purchase postage-paid boxes and mail products to TerraCycle US for recycling.

• Net sales: $13.6 million
• Sales change from 2021: +21%
• Income (before taxes): $1.3 million
• Income change from 2021: -70%

Regulated Waste: This division helps consumers recycle streams such as fluorescent lamps, bulbs, batteries, scrap electronics, organic waste, medical waste and other materials.

• Net sales: $5.8 million
• Sales change from 2021: +2%
• Income (before taxes): $172,000
• Income change from 2021: Improvement from loss of $109,000

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: $3.5 million
• Sales change from 2021: +247%
• Income (before taxes): $1 million
• Income change from 2021: Improved from loss of $2.7 million

TerraCycle US also disclosed that its top customer for its recovered material sales in 2022 was Life Science Logistics.

TerraCycle US noted that it experienced increased costs of sales and operating expenses in 2022, decreasing pre-tax income. A number of reasons were cited, including higher material processing, warehousing and shipping costs; the hiring of additional staff to grow the business; facility consolidation expenses; increased travel and expenses; and more. 

Company managers called out the better results in the Sponsored Waste and Zero Waste Boxes segments, saying the former saw many long-term clients continuing and strengthening their commitments to their recycling programs. “Retail activation (collection of waste at select retailers) continues to provide growth opportunities,” the filing added. The Zero Waste Boxes segment’s growth came from increased spending on marketing, the report noted. 

The Regulated Waste and Material Sales segments both rebounded from 2021 COVID-19 closures, the company stated. The Regulated Waste segment, which was particularly harmed by office closures, improved as a result of a return to a pre-pandemic marketplace, as well as TerraCycle US’s marketing and sales efforts.

Consolidating the processing footprint

In December, TerraCycle paid $5.7 million to buy a 130,000-square-foot space in Aurora, Ill., most of it financed through a 10-year loan from Citibank. Calling the building a MRF, the financial filing says the facility “positions us well for future growth and scaling. The facility’s size means we can meaningfully grow without needing to lease additional space or renegotiate contracts with vendors.”

As a result of the purchase, TerraCycle is in the process of winding down its third-party warehouses in Aston, Pa.; Bloomington, Ill.; and Bells, Tenn.