Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Clean Harbors Announces Third-Quarter 2024 Financial Results By: Clean Harbors, Inc. via Business Wire October 30, 2024 at 07:30 AM EDT Posts 12% Q3 Revenue Increase to $1.53 Billion, Led by Strength in Field Services Generates 26% Q3 Net Income Growth to $115.2 Million, or EPS of $2.12 Achieves 18% Growth in Q3 Adjusted EBITDA to $301.8 Million with Margin of 19.7% Revises Full-Year 2024 Adjusted EBITDA and Adjusted Free Cash Flow Guidance Commercial Launch of Kimball, Nebraska Incinerator Planned for November Clean Harbors, Inc. (“Clean Harbors” or the “Company”) (NYSE: CLH), the leading provider of environmental and industrial services throughout North America, today announced financial results for the third quarter ended September 30, 2024. “We delivered profitable growth in both our operating segments while improving our consolidated Adjusted EBITDA margin by 100 basis points from the same period a year ago,” said Mike Battles, Co-Chief Executive Officer. “Underlying demand remained healthy across our Environmental Services (ES) segment. Despite higher Adjusted EBITDA, our Safety-Kleen Sustainability Solutions (SKSS) segment results reflected softer-than-expected demand and pricing of base oil and lubricants throughout the quarter with a more meaningful decline in September. We continue to prioritize safety with industry-leading results, achieving a Total Recordable Incident Rate (TRIR) of 0.69 year-to-date through September.” Third-Quarter 2024 Results Revenues grew 12% to $1.53 billion, compared with $1.37 billion in the same period of 2023. Income from operations increased 25% to $192.3 million, compared with $154.4 million in the third quarter of 2023. Net income was up 26% to $115.2 million, or $2.12 per diluted share, compared with $91.3 million, or $1.68 per diluted share, for the same period in 2023. Adjusted EBITDA (see description and reconciliation below) grew 18% to $301.8 million, compared with $255.0 million in the same period of 2023. Third-Quarter 2024 Segment Review “Our ES segment achieved a 13% increase in revenue and 15% growth in Adjusted EBITDA, which generated a 40-basis point improvement in segment margin. The third quarter marks our tenth consecutive quarter of year-over-year margin improvement in the ES segment,” said Eric Gerstenberg, Co-Chief Executive Officer. “ES growth was led by Field Services, which grew 68%, reflecting the HEPACO acquisition earlier this year and healthy organic growth in our legacy business. Technical Services revenue grew 8% on higher network volumes and pricing. Incineration utilization was 89% for the quarter, up from 86% in the same period a year ago. Average incineration pricing increased 6%. Safety-Kleen Environmental Services posted another consistent performance with 8% revenue growth in the ES segment. Our Industrial Services business experienced a difficult environment in Q3 resulting from weakness in the U.S. refinery space, where we saw work deferred and fall turnarounds scaled back given industry challenges in that vertical.” “SKSS results improved from the third quarter a year ago. Revenues grew 6%, reflecting the contribution of our Noble Oil acquisition in March, while Adjusted EBITDA increased 32%,” said Battles. “However, current supply overhangs in the base oil market resulted in lower demand and pricing pressure, which caused a weaker-than-anticipated EBITDA performance this quarter.” Business Outlook and Financial Guidance “As we enter the final quarter of 2024, the overall demand environment in North America is healthy, and the outlook for our ES segment is positive,” Gerstenberg said. “Favorable market dynamics, including reshoring, infrastructure spending, PFAS, and other regulatory changes should continue to fuel growth opportunities for Clean Harbors. We are meeting these opportunities with new capacity and capabilities. The commercial launch of our new incinerator in Kimball, Nebraska is scheduled for November, providing an essential outlet for additional hazardous waste volumes as it ramps up over the next 12-18 months. On the services side, the addition of HEPACO’s emergency response capabilities creates a foundation for continued growth in Field Services. We also expect our Technical Services and SK Environmental businesses to grow steadily, feeding volumes into Kimball and the other facilities in our network. In Industrial Services, we are taking actions to counter the weakness in fall turnarounds and look to return that business to revenue growth in 2025.” “Within SKSS, we remain committed to stabilizing our business amidst the current pricing challenges and weak demand for base oil. We are taking decisive actions to reduce production and collection costs while also pursuing growth initiatives in Group III, blended sales, and our partnership with Castrol. These programs have the potential to reduce the carbon footprints of businesses significantly, and we believe they will gain traction as more customers look to Safety-Kleen as their sustainability partner in the coming years,” Battles concluded. “Overall, despite some market obstacles related to base oil and refining customers, we expect to end 2024 with strong momentum across our network of disposal facilities and service offerings giving us a positive trajectory into 2025.” Based on its third-quarter performance and current forecast, Clean Harbors revised its full-year 2024 guidance and now expects: Adjusted EBITDA in the range of $1.10 billion to $1.12 billion, or a midpoint of $1.11 billion, which represents 10% growth year-over-year. This Adjusted EBITDA range is based on anticipated GAAP net income in the range of $375 million to $395 million. Adjusted free cash flow in the range of $280 million to $320 million, or a midpoint of $300 million, which includes spending related to the Kimball incinerator and the Company’s Baltimore expansion. The Company is revising this range due to its new Adjusted EBITDA guidance and increased short-term working capital levels. This new range is based on anticipated net cash from operating activities in the range of $680 million to $750 million. Non-GAAP Results Clean Harbors reports Adjusted EBITDA, which is a non-GAAP financial measure and should not be considered an alternative to net income or other measurements under generally accepted accounting principles (GAAP) but viewed only as a supplement to those measurements. Adjusted EBITDA is not calculated identically by all companies, and therefore the Company’s measurement of Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies. Clean Harbors believes that Adjusted EBITDA provides additional useful information to investors because the Company’s management routinely evaluates the performance of its businesses based upon levels of Adjusted EBITDA, which excludes certain expenses relating to transactions not reflective of our core operations, and because the Company’s loan covenants are based upon levels of Adjusted EBITDA achieved. The Company defines Adjusted EBITDA consistent with its existing revolving credit agreement, as described in the following reconciliation showing the differences between reported GAAP net income and Adjusted EBITDA for the three and nine months ended September 30, 2024 and 2023 (in thousands, except percentages): Three Months Ended Nine Months Ended September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023 Net income $ 115,213 $ 91,340 $ 318,325 $ 279,507 Accretion of environmental liabilities 3,618 3,388 10,139 10,281 Stock-based compensation 5,837 4,291 20,690 14,809 Depreciation and amortization 100,063 92,970 295,632 267,425 Other expense (income), net 1,123 (334 ) 2,431 833 Loss on early extinguishment of debt — — — 2,362 Interest expense, net of interest income 35,779 29,696 100,767 80,400 Provision for income taxes 40,181 33,666 111,741 102,044 Adjusted EBITDA $ 301,814 $ 255,017 $ 859,725 $ 757,661 Adjusted EBITDA Margin 19.7 % 18.7 % 19.3 % 18.6 % Adjusted Free Cash Flow Reconciliation Clean Harbors reports adjusted free cash flow, which is a non-GAAP financial measure that should not be considered an alternative to net cash from operating activities or other measurements under GAAP. The Company considers adjusted free cash flow to be a measurement of liquidity that provides useful information to investors about its ability to generate cash. The Company defines adjusted free cash flow as net cash from operating activities excluding cash impacts of items derived from non-operating activities, less additions to property, plant and equipment plus proceeds from sale and disposal of fixed assets. Adjusted free cash flow is not calculated identically by all companies, and therefore the Company’s measurement of adjusted free cash flow may not be comparable to similarly titled measures reported by other companies. An itemized reconciliation between reported GAAP net cash from operating activities and adjusted free cash flow is as follows for the three and nine months ended September 30, 2024 and 2023 (in thousands): Three Months Ended Nine Months Ended September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023 Adjusted free cash flow Net cash from operating activities $ 239,239 $ 220,119 $ 473,833 $ 455,692 Additions to property, plant and equipment (96,803 ) (107,608 ) (369,826 ) (311,906 ) Proceeds from sale and disposal of fixed assets 2,058 2,185 6,353 5,129 Adjusted free cash flow $ 144,494 $ 114,696 $ 110,360 $ 148,915 Adjusted EBITDA Guidance Reconciliation An itemized reconciliation between projected GAAP net income and projected Adjusted EBITDA is as follows (in millions): For the Year Ending December 31, 2024 Projected net income $375 to $395 Adjustments: Accretion of environmental liabilities 15 to 14 Stock-based compensation 27 to 30 Depreciation and amortization 405 to 395 Interest expense, net 145 to 140 Provision for income taxes 133 to 146 Projected Adjusted EBITDA $1,100 to $1,120 Adjusted Free Cash Flow Guidance Reconciliation An itemized reconciliation between projected GAAP net cash from operating activities and projected adjusted free cash flow is as follows (in millions): For the Year Ending December 31, 2024 Projected net cash from operating activities $680 to $750 Additions to property, plant and equipment (410) to (440) Proceeds from sale and disposal of fixed assets 10 to 10 Projected adjusted free cash flow $280 to $320 Conference Call Information Clean Harbors will conduct a conference call for investors today at 9:00 a.m. (ET) to discuss the information contained in this press release. During the call, management will discuss Clean Harbors’ financial results, business outlook and growth strategy. Investors who wish to listen to the webcast and view the accompanying slides should visit the Investor Relations section of the Company’s website at www.cleanharbors.com. The live call also can be accessed by dialing 877.709.8155 or 201.689.8881 prior to the start time. If you are unable to listen to the live conference call, the webcast will be archived on the Company’s website. About Clean Harbors Clean Harbors (NYSE: CLH) is North America’s leading provider of environmental and industrial services. The Company serves a diverse customer base, including a majority of Fortune 500 companies. Its customer base spans a number of industries, including chemical, manufacturing and refining, as well as numerous government agencies. These customers rely on Clean Harbors to deliver a broad range of services such as end-to-end hazardous waste management, emergency spill response, industrial cleaning and maintenance, and recycling services. Through its Safety-Kleen subsidiary, Clean Harbors also is a leading provider of parts washers and environmental services to commercial, industrial and automotive customers, as well as North America’s largest re-refiner and recycler of used oil. Founded in 1980 and based in Massachusetts, Clean Harbors operates in the United States, Canada, Mexico, Puerto Rico and India. For more information, visit www.cleanharbors.com. Safe Harbor Statement Any statements contained herein that are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are generally identifiable by use of the words “believes,” “expects,” “intends,” “anticipates,” “plans to,” “seeks,” “should,” “estimates,” “projects,” “may,” “likely,” “potential” or similar expressions. Such statements may include, but are not limited to, statements about the Company’s future financial and operating results, plans, strategy, objectives and goals, cost management initiatives, contingent liabilities, liquidity, business and market conditions, customer demand, acquisitions, growth opportunities, expectations, and other statements that are not historical facts. Such statements are based upon the beliefs and expectations of Clean Harbors’ management as of the date of this press release only and are subject to certain risks and uncertainties that could cause actual results to differ materially, including, without limitation, those items identified as “Risk Factors” in Clean Harbors’ most recently filed reports on Form 10-K and Form 10-Q. Forward-looking statements are neither historical facts nor assurances of future performance. Therefore, readers are cautioned not to place undue reliance on these forward-looking statements. Clean Harbors undertakes no obligation to revise or publicly release the results of any revision to these forward-looking statements other than through its filings with the Securities and Exchange Commission, which may be viewed in the “Investors” section of Clean Harbors’ website at www.cleanharbors.com. CLEAN HARBORS, INC. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) Three Months Ended Nine Months Ended September 30, September 30, 2024 2023 2024 2023 Revenues $ 1,529,422 $ 1,365,696 $ 4,458,836 $ 4,070,983 Cost of revenues (exclusive of items shown separately below) 1,055,599 943,951 3,062,211 2,822,977 Selling, general and administrative expenses 177,846 171,019 557,590 505,154 Accretion of environmental liabilities 3,618 3,388 10,139 10,281 Depreciation and amortization 100,063 92,970 295,632 267,425 Income from operations 192,296 154,368 533,264 465,146 Other (expense) income, net (1,123 ) 334 (2,431 ) (833 ) Loss on early extinguishment of debt — — — (2,362 ) Interest expense, net (35,779 ) (29,696 ) (100,767 ) (80,400 ) Income before provision for income taxes 155,394 125,006 430,066 381,551 Provision for income taxes 40,181 33,666 111,741 102,044 Net income $ 115,213 $ 91,340 $ 318,325 $ 279,507 Earnings per share: Basic $ 2.14 $ 1.69 $ 5.90 $ 5.17 Diluted $ 2.12 $ 1.68 $ 5.87 $ 5.14 Shares used to compute earnings per share - Basic 53,951 54,122 53,936 54,097 Shares used to compute earnings per share - Diluted 54,229 54,419 54,229 54,411 CLEAN HARBORS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) September 30, 2024 December 31, 2023 Current assets: (unaudited) Cash and cash equivalents $ 512,371 $ 444,698 Short-term marketable securities 82,371 106,101 Accounts receivable, net 1,100,660 983,111 Unbilled accounts receivable 204,308 107,859 Inventories and supplies 376,564 327,511 Prepaid expenses and other current assets 78,204 82,939 Total current assets 2,354,478 2,052,219 Property, plant and equipment, net 2,452,312 2,193,318 Other assets: Operating lease right-of-use assets 246,061 187,060 Goodwill 1,485,065 1,287,736 Permits and other intangibles, net 708,935 602,797 Other long-term assets 59,159 59,739 Total other assets 2,499,220 2,137,332 Total assets $ 7,306,010 $ 6,382,869 Current liabilities: Current portion of long-term debt $ 15,102 $ 10,000 Accounts payable 504,206 451,806 Deferred revenue 103,291 95,230 Accrued expenses and other current liabilities 398,236 397,157 Current portion of closure, post-closure and remedial liabilities 30,477 26,914 Current portion of operating lease liabilities 70,539 56,430 Total current liabilities 1,121,851 1,037,537 Other liabilities: Closure and post-closure liabilities, less current portion 105,375 105,044 Remedial liabilities, less current portion 94,384 97,885 Long-term debt, less current portion 2,773,659 2,291,717 Operating lease liabilities, less current portion 179,040 131,743 Deferred tax liabilities 356,150 353,107 Other long-term liabilities 147,241 118,330 Total other liabilities 3,655,849 3,097,826 Total stockholders’ equity, net 2,528,310 2,247,506 Total liabilities and stockholders’ equity $ 7,306,010 $ 6,382,869 CLEAN HARBORS, INC. AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Nine Months Ended September 30, 2024 September 30, 2023 Cash flows from operating activities: Net income $ 318,325 $ 279,507 Adjustments to reconcile net income to net cash from operating activities: Depreciation and amortization 295,632 267,425 Allowance for doubtful accounts 5,674 2,620 Amortization of deferred financing costs and debt discount 4,623 4,036 Accretion of environmental liabilities 10,139 10,281 Changes in environmental liability estimates 4,347 3,258 Deferred income taxes (418 ) (356 ) Other expense, net 2,431 833 Stock-based compensation 20,690 14,809 Loss on early extinguishment of debt — 2,362 Environmental expenditures (19,679 ) (24,064 ) Changes in assets and liabilities, net of acquisitions: Accounts receivable and unbilled accounts receivable (145,647 ) (46,445 ) Inventories and supplies (39,673 ) 12,691 Other current and long-term assets (47,826 ) (18,190 ) Accounts payable 30,004 (40,013 ) Other current and long-term liabilities 35,211 (13,062 ) Net cash from operating activities 473,833 455,692 Cash flows used in investing activities: Additions to property, plant and equipment (369,826 ) (311,906 ) Proceeds from sale and disposal of fixed assets 6,353 5,129 Acquisitions, net of cash acquired (474,011 ) (119,596 ) Proceeds from sale of business 750 750 Additions to intangible assets including costs to obtain or renew permits (2,545 ) (1,507 ) Purchases of available-for-sale securities (73,682 ) (104,329 ) Proceeds from sale of available-for-sale securities 100,021 84,390 Net cash used in investing activities (812,940 ) (447,069 ) Cash flows from (used in) financing activities: Change in uncashed checks (5,852 ) 3,004 Tax payments related to withholdings on vested restricted stock (11,514 ) (10,886 ) Repurchases of common stock (30,215 ) (18,000 ) Deferred financing costs paid (8,316 ) (6,371 ) Payments on finance leases (23,596 ) (11,594 ) Principal payments on debt (11,327 ) (621,475 ) Proceeds from issuance of debt, net of discount 499,375 500,000 Borrowing from revolving credit facility — 114,000 Payment on revolving credit facility — (114,000 ) Net cash from (used in) financing activities 408,555 (165,322 ) Effect of exchange rate change on cash (1,775 ) 61 Increase (decrease) in cash and cash equivalents 67,673 (156,638 ) Cash and cash equivalents, beginning of period 444,698 492,603 Cash and cash equivalents, end of period $ 512,371 $ 335,965 Supplemental information: Cash payments for interest and income taxes: Interest paid $ 134,177 $ 100,813 Income taxes paid, net of refunds 100,752 107,328 Non-cash investing activities: Property, plant and equipment accrued 43,604 29,127 ROU assets obtained in exchange for operating lease liabilities 98,927 61,741 ROU assets obtained in exchange for finance lease liabilities 53,391 26,317 Supplemental Segment Data (in thousands) Three Months Ended Revenue September 30, 2024 September 30, 2023 Third-Party Revenues Intersegment Revenues (Expenses), net Direct Revenues Third-Party Revenues Intersegment Revenues (Expenses), net Direct Revenues Environmental Services $ 1,287,650 $ 9,537 $ 1,297,187 $ 1,135,279 $ 11,084 $ 1,146,363 Safety-Kleen Sustainability Solutions 241,676 (9,537 ) 232,139 230,305 (11,084 ) 219,221 Corporate Items 96 — 96 112 — 112 Total $ 1,529,422 $ — $ 1,529,422 $ 1,365,696 $ — $ 1,365,696 Nine Months Ended Revenue September 30, 2024 September 30, 2023 Third-Party Revenues Intersegment Revenues (Expenses), net Direct Revenues Third-Party Revenues Intersegment Revenues (Expenses), net Direct Revenues Environmental Services $ 3,746,227 $ 32,853 $ 3,779,080 $ 3,357,743 $ 31,397 $ 3,389,140 Safety-Kleen Sustainability Solutions 712,312 (32,853 ) 679,459 712,905 (31,397 ) 681,508 Corporate Items 297 — 297 335 — 335 Total $ 4,458,836 $ — $ 4,458,836 $ 4,070,983 $ — $ 4,070,983 Three Months Ended Nine Months Ended Adjusted EBITDA September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023 Environmental Services $ 332,502 $ 288,982 $ 956,892 $ 822,949 Safety-Kleen Sustainability Solutions 41,226 31,146 122,402 126,024 Corporate Items (71,914 ) (65,111 ) (219,569 ) (191,312 ) Total $ 301,814 $ 255,017 $ 859,725 $ 757,661 View source version on businesswire.com: https://www.businesswire.com/news/home/20241029468697/en/Contacts Eric J. Dugas EVP and Chief Financial Officer Clean Harbors, Inc. 781.792.5100 InvestorRelations@cleanharbors.com Jim Buckley SVP Investor Relations Clean Harbors, Inc. 781.792.5100 Buckley.James@cleanharbors.com Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
Clean Harbors Announces Third-Quarter 2024 Financial Results By: Clean Harbors, Inc. via Business Wire October 30, 2024 at 07:30 AM EDT Posts 12% Q3 Revenue Increase to $1.53 Billion, Led by Strength in Field Services Generates 26% Q3 Net Income Growth to $115.2 Million, or EPS of $2.12 Achieves 18% Growth in Q3 Adjusted EBITDA to $301.8 Million with Margin of 19.7% Revises Full-Year 2024 Adjusted EBITDA and Adjusted Free Cash Flow Guidance Commercial Launch of Kimball, Nebraska Incinerator Planned for November Clean Harbors, Inc. (“Clean Harbors” or the “Company”) (NYSE: CLH), the leading provider of environmental and industrial services throughout North America, today announced financial results for the third quarter ended September 30, 2024. “We delivered profitable growth in both our operating segments while improving our consolidated Adjusted EBITDA margin by 100 basis points from the same period a year ago,” said Mike Battles, Co-Chief Executive Officer. “Underlying demand remained healthy across our Environmental Services (ES) segment. Despite higher Adjusted EBITDA, our Safety-Kleen Sustainability Solutions (SKSS) segment results reflected softer-than-expected demand and pricing of base oil and lubricants throughout the quarter with a more meaningful decline in September. We continue to prioritize safety with industry-leading results, achieving a Total Recordable Incident Rate (TRIR) of 0.69 year-to-date through September.” Third-Quarter 2024 Results Revenues grew 12% to $1.53 billion, compared with $1.37 billion in the same period of 2023. Income from operations increased 25% to $192.3 million, compared with $154.4 million in the third quarter of 2023. Net income was up 26% to $115.2 million, or $2.12 per diluted share, compared with $91.3 million, or $1.68 per diluted share, for the same period in 2023. Adjusted EBITDA (see description and reconciliation below) grew 18% to $301.8 million, compared with $255.0 million in the same period of 2023. Third-Quarter 2024 Segment Review “Our ES segment achieved a 13% increase in revenue and 15% growth in Adjusted EBITDA, which generated a 40-basis point improvement in segment margin. The third quarter marks our tenth consecutive quarter of year-over-year margin improvement in the ES segment,” said Eric Gerstenberg, Co-Chief Executive Officer. “ES growth was led by Field Services, which grew 68%, reflecting the HEPACO acquisition earlier this year and healthy organic growth in our legacy business. Technical Services revenue grew 8% on higher network volumes and pricing. Incineration utilization was 89% for the quarter, up from 86% in the same period a year ago. Average incineration pricing increased 6%. Safety-Kleen Environmental Services posted another consistent performance with 8% revenue growth in the ES segment. Our Industrial Services business experienced a difficult environment in Q3 resulting from weakness in the U.S. refinery space, where we saw work deferred and fall turnarounds scaled back given industry challenges in that vertical.” “SKSS results improved from the third quarter a year ago. Revenues grew 6%, reflecting the contribution of our Noble Oil acquisition in March, while Adjusted EBITDA increased 32%,” said Battles. “However, current supply overhangs in the base oil market resulted in lower demand and pricing pressure, which caused a weaker-than-anticipated EBITDA performance this quarter.” Business Outlook and Financial Guidance “As we enter the final quarter of 2024, the overall demand environment in North America is healthy, and the outlook for our ES segment is positive,” Gerstenberg said. “Favorable market dynamics, including reshoring, infrastructure spending, PFAS, and other regulatory changes should continue to fuel growth opportunities for Clean Harbors. We are meeting these opportunities with new capacity and capabilities. The commercial launch of our new incinerator in Kimball, Nebraska is scheduled for November, providing an essential outlet for additional hazardous waste volumes as it ramps up over the next 12-18 months. On the services side, the addition of HEPACO’s emergency response capabilities creates a foundation for continued growth in Field Services. We also expect our Technical Services and SK Environmental businesses to grow steadily, feeding volumes into Kimball and the other facilities in our network. In Industrial Services, we are taking actions to counter the weakness in fall turnarounds and look to return that business to revenue growth in 2025.” “Within SKSS, we remain committed to stabilizing our business amidst the current pricing challenges and weak demand for base oil. We are taking decisive actions to reduce production and collection costs while also pursuing growth initiatives in Group III, blended sales, and our partnership with Castrol. These programs have the potential to reduce the carbon footprints of businesses significantly, and we believe they will gain traction as more customers look to Safety-Kleen as their sustainability partner in the coming years,” Battles concluded. “Overall, despite some market obstacles related to base oil and refining customers, we expect to end 2024 with strong momentum across our network of disposal facilities and service offerings giving us a positive trajectory into 2025.” Based on its third-quarter performance and current forecast, Clean Harbors revised its full-year 2024 guidance and now expects: Adjusted EBITDA in the range of $1.10 billion to $1.12 billion, or a midpoint of $1.11 billion, which represents 10% growth year-over-year. This Adjusted EBITDA range is based on anticipated GAAP net income in the range of $375 million to $395 million. Adjusted free cash flow in the range of $280 million to $320 million, or a midpoint of $300 million, which includes spending related to the Kimball incinerator and the Company’s Baltimore expansion. The Company is revising this range due to its new Adjusted EBITDA guidance and increased short-term working capital levels. This new range is based on anticipated net cash from operating activities in the range of $680 million to $750 million. Non-GAAP Results Clean Harbors reports Adjusted EBITDA, which is a non-GAAP financial measure and should not be considered an alternative to net income or other measurements under generally accepted accounting principles (GAAP) but viewed only as a supplement to those measurements. Adjusted EBITDA is not calculated identically by all companies, and therefore the Company’s measurement of Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies. Clean Harbors believes that Adjusted EBITDA provides additional useful information to investors because the Company’s management routinely evaluates the performance of its businesses based upon levels of Adjusted EBITDA, which excludes certain expenses relating to transactions not reflective of our core operations, and because the Company’s loan covenants are based upon levels of Adjusted EBITDA achieved. The Company defines Adjusted EBITDA consistent with its existing revolving credit agreement, as described in the following reconciliation showing the differences between reported GAAP net income and Adjusted EBITDA for the three and nine months ended September 30, 2024 and 2023 (in thousands, except percentages): Three Months Ended Nine Months Ended September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023 Net income $ 115,213 $ 91,340 $ 318,325 $ 279,507 Accretion of environmental liabilities 3,618 3,388 10,139 10,281 Stock-based compensation 5,837 4,291 20,690 14,809 Depreciation and amortization 100,063 92,970 295,632 267,425 Other expense (income), net 1,123 (334 ) 2,431 833 Loss on early extinguishment of debt — — — 2,362 Interest expense, net of interest income 35,779 29,696 100,767 80,400 Provision for income taxes 40,181 33,666 111,741 102,044 Adjusted EBITDA $ 301,814 $ 255,017 $ 859,725 $ 757,661 Adjusted EBITDA Margin 19.7 % 18.7 % 19.3 % 18.6 % Adjusted Free Cash Flow Reconciliation Clean Harbors reports adjusted free cash flow, which is a non-GAAP financial measure that should not be considered an alternative to net cash from operating activities or other measurements under GAAP. The Company considers adjusted free cash flow to be a measurement of liquidity that provides useful information to investors about its ability to generate cash. The Company defines adjusted free cash flow as net cash from operating activities excluding cash impacts of items derived from non-operating activities, less additions to property, plant and equipment plus proceeds from sale and disposal of fixed assets. Adjusted free cash flow is not calculated identically by all companies, and therefore the Company’s measurement of adjusted free cash flow may not be comparable to similarly titled measures reported by other companies. An itemized reconciliation between reported GAAP net cash from operating activities and adjusted free cash flow is as follows for the three and nine months ended September 30, 2024 and 2023 (in thousands): Three Months Ended Nine Months Ended September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023 Adjusted free cash flow Net cash from operating activities $ 239,239 $ 220,119 $ 473,833 $ 455,692 Additions to property, plant and equipment (96,803 ) (107,608 ) (369,826 ) (311,906 ) Proceeds from sale and disposal of fixed assets 2,058 2,185 6,353 5,129 Adjusted free cash flow $ 144,494 $ 114,696 $ 110,360 $ 148,915 Adjusted EBITDA Guidance Reconciliation An itemized reconciliation between projected GAAP net income and projected Adjusted EBITDA is as follows (in millions): For the Year Ending December 31, 2024 Projected net income $375 to $395 Adjustments: Accretion of environmental liabilities 15 to 14 Stock-based compensation 27 to 30 Depreciation and amortization 405 to 395 Interest expense, net 145 to 140 Provision for income taxes 133 to 146 Projected Adjusted EBITDA $1,100 to $1,120 Adjusted Free Cash Flow Guidance Reconciliation An itemized reconciliation between projected GAAP net cash from operating activities and projected adjusted free cash flow is as follows (in millions): For the Year Ending December 31, 2024 Projected net cash from operating activities $680 to $750 Additions to property, plant and equipment (410) to (440) Proceeds from sale and disposal of fixed assets 10 to 10 Projected adjusted free cash flow $280 to $320 Conference Call Information Clean Harbors will conduct a conference call for investors today at 9:00 a.m. (ET) to discuss the information contained in this press release. During the call, management will discuss Clean Harbors’ financial results, business outlook and growth strategy. Investors who wish to listen to the webcast and view the accompanying slides should visit the Investor Relations section of the Company’s website at www.cleanharbors.com. The live call also can be accessed by dialing 877.709.8155 or 201.689.8881 prior to the start time. If you are unable to listen to the live conference call, the webcast will be archived on the Company’s website. About Clean Harbors Clean Harbors (NYSE: CLH) is North America’s leading provider of environmental and industrial services. The Company serves a diverse customer base, including a majority of Fortune 500 companies. Its customer base spans a number of industries, including chemical, manufacturing and refining, as well as numerous government agencies. These customers rely on Clean Harbors to deliver a broad range of services such as end-to-end hazardous waste management, emergency spill response, industrial cleaning and maintenance, and recycling services. Through its Safety-Kleen subsidiary, Clean Harbors also is a leading provider of parts washers and environmental services to commercial, industrial and automotive customers, as well as North America’s largest re-refiner and recycler of used oil. Founded in 1980 and based in Massachusetts, Clean Harbors operates in the United States, Canada, Mexico, Puerto Rico and India. For more information, visit www.cleanharbors.com. Safe Harbor Statement Any statements contained herein that are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are generally identifiable by use of the words “believes,” “expects,” “intends,” “anticipates,” “plans to,” “seeks,” “should,” “estimates,” “projects,” “may,” “likely,” “potential” or similar expressions. Such statements may include, but are not limited to, statements about the Company’s future financial and operating results, plans, strategy, objectives and goals, cost management initiatives, contingent liabilities, liquidity, business and market conditions, customer demand, acquisitions, growth opportunities, expectations, and other statements that are not historical facts. Such statements are based upon the beliefs and expectations of Clean Harbors’ management as of the date of this press release only and are subject to certain risks and uncertainties that could cause actual results to differ materially, including, without limitation, those items identified as “Risk Factors” in Clean Harbors’ most recently filed reports on Form 10-K and Form 10-Q. Forward-looking statements are neither historical facts nor assurances of future performance. Therefore, readers are cautioned not to place undue reliance on these forward-looking statements. Clean Harbors undertakes no obligation to revise or publicly release the results of any revision to these forward-looking statements other than through its filings with the Securities and Exchange Commission, which may be viewed in the “Investors” section of Clean Harbors’ website at www.cleanharbors.com. CLEAN HARBORS, INC. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) Three Months Ended Nine Months Ended September 30, September 30, 2024 2023 2024 2023 Revenues $ 1,529,422 $ 1,365,696 $ 4,458,836 $ 4,070,983 Cost of revenues (exclusive of items shown separately below) 1,055,599 943,951 3,062,211 2,822,977 Selling, general and administrative expenses 177,846 171,019 557,590 505,154 Accretion of environmental liabilities 3,618 3,388 10,139 10,281 Depreciation and amortization 100,063 92,970 295,632 267,425 Income from operations 192,296 154,368 533,264 465,146 Other (expense) income, net (1,123 ) 334 (2,431 ) (833 ) Loss on early extinguishment of debt — — — (2,362 ) Interest expense, net (35,779 ) (29,696 ) (100,767 ) (80,400 ) Income before provision for income taxes 155,394 125,006 430,066 381,551 Provision for income taxes 40,181 33,666 111,741 102,044 Net income $ 115,213 $ 91,340 $ 318,325 $ 279,507 Earnings per share: Basic $ 2.14 $ 1.69 $ 5.90 $ 5.17 Diluted $ 2.12 $ 1.68 $ 5.87 $ 5.14 Shares used to compute earnings per share - Basic 53,951 54,122 53,936 54,097 Shares used to compute earnings per share - Diluted 54,229 54,419 54,229 54,411 CLEAN HARBORS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) September 30, 2024 December 31, 2023 Current assets: (unaudited) Cash and cash equivalents $ 512,371 $ 444,698 Short-term marketable securities 82,371 106,101 Accounts receivable, net 1,100,660 983,111 Unbilled accounts receivable 204,308 107,859 Inventories and supplies 376,564 327,511 Prepaid expenses and other current assets 78,204 82,939 Total current assets 2,354,478 2,052,219 Property, plant and equipment, net 2,452,312 2,193,318 Other assets: Operating lease right-of-use assets 246,061 187,060 Goodwill 1,485,065 1,287,736 Permits and other intangibles, net 708,935 602,797 Other long-term assets 59,159 59,739 Total other assets 2,499,220 2,137,332 Total assets $ 7,306,010 $ 6,382,869 Current liabilities: Current portion of long-term debt $ 15,102 $ 10,000 Accounts payable 504,206 451,806 Deferred revenue 103,291 95,230 Accrued expenses and other current liabilities 398,236 397,157 Current portion of closure, post-closure and remedial liabilities 30,477 26,914 Current portion of operating lease liabilities 70,539 56,430 Total current liabilities 1,121,851 1,037,537 Other liabilities: Closure and post-closure liabilities, less current portion 105,375 105,044 Remedial liabilities, less current portion 94,384 97,885 Long-term debt, less current portion 2,773,659 2,291,717 Operating lease liabilities, less current portion 179,040 131,743 Deferred tax liabilities 356,150 353,107 Other long-term liabilities 147,241 118,330 Total other liabilities 3,655,849 3,097,826 Total stockholders’ equity, net 2,528,310 2,247,506 Total liabilities and stockholders’ equity $ 7,306,010 $ 6,382,869 CLEAN HARBORS, INC. AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Nine Months Ended September 30, 2024 September 30, 2023 Cash flows from operating activities: Net income $ 318,325 $ 279,507 Adjustments to reconcile net income to net cash from operating activities: Depreciation and amortization 295,632 267,425 Allowance for doubtful accounts 5,674 2,620 Amortization of deferred financing costs and debt discount 4,623 4,036 Accretion of environmental liabilities 10,139 10,281 Changes in environmental liability estimates 4,347 3,258 Deferred income taxes (418 ) (356 ) Other expense, net 2,431 833 Stock-based compensation 20,690 14,809 Loss on early extinguishment of debt — 2,362 Environmental expenditures (19,679 ) (24,064 ) Changes in assets and liabilities, net of acquisitions: Accounts receivable and unbilled accounts receivable (145,647 ) (46,445 ) Inventories and supplies (39,673 ) 12,691 Other current and long-term assets (47,826 ) (18,190 ) Accounts payable 30,004 (40,013 ) Other current and long-term liabilities 35,211 (13,062 ) Net cash from operating activities 473,833 455,692 Cash flows used in investing activities: Additions to property, plant and equipment (369,826 ) (311,906 ) Proceeds from sale and disposal of fixed assets 6,353 5,129 Acquisitions, net of cash acquired (474,011 ) (119,596 ) Proceeds from sale of business 750 750 Additions to intangible assets including costs to obtain or renew permits (2,545 ) (1,507 ) Purchases of available-for-sale securities (73,682 ) (104,329 ) Proceeds from sale of available-for-sale securities 100,021 84,390 Net cash used in investing activities (812,940 ) (447,069 ) Cash flows from (used in) financing activities: Change in uncashed checks (5,852 ) 3,004 Tax payments related to withholdings on vested restricted stock (11,514 ) (10,886 ) Repurchases of common stock (30,215 ) (18,000 ) Deferred financing costs paid (8,316 ) (6,371 ) Payments on finance leases (23,596 ) (11,594 ) Principal payments on debt (11,327 ) (621,475 ) Proceeds from issuance of debt, net of discount 499,375 500,000 Borrowing from revolving credit facility — 114,000 Payment on revolving credit facility — (114,000 ) Net cash from (used in) financing activities 408,555 (165,322 ) Effect of exchange rate change on cash (1,775 ) 61 Increase (decrease) in cash and cash equivalents 67,673 (156,638 ) Cash and cash equivalents, beginning of period 444,698 492,603 Cash and cash equivalents, end of period $ 512,371 $ 335,965 Supplemental information: Cash payments for interest and income taxes: Interest paid $ 134,177 $ 100,813 Income taxes paid, net of refunds 100,752 107,328 Non-cash investing activities: Property, plant and equipment accrued 43,604 29,127 ROU assets obtained in exchange for operating lease liabilities 98,927 61,741 ROU assets obtained in exchange for finance lease liabilities 53,391 26,317 Supplemental Segment Data (in thousands) Three Months Ended Revenue September 30, 2024 September 30, 2023 Third-Party Revenues Intersegment Revenues (Expenses), net Direct Revenues Third-Party Revenues Intersegment Revenues (Expenses), net Direct Revenues Environmental Services $ 1,287,650 $ 9,537 $ 1,297,187 $ 1,135,279 $ 11,084 $ 1,146,363 Safety-Kleen Sustainability Solutions 241,676 (9,537 ) 232,139 230,305 (11,084 ) 219,221 Corporate Items 96 — 96 112 — 112 Total $ 1,529,422 $ — $ 1,529,422 $ 1,365,696 $ — $ 1,365,696 Nine Months Ended Revenue September 30, 2024 September 30, 2023 Third-Party Revenues Intersegment Revenues (Expenses), net Direct Revenues Third-Party Revenues Intersegment Revenues (Expenses), net Direct Revenues Environmental Services $ 3,746,227 $ 32,853 $ 3,779,080 $ 3,357,743 $ 31,397 $ 3,389,140 Safety-Kleen Sustainability Solutions 712,312 (32,853 ) 679,459 712,905 (31,397 ) 681,508 Corporate Items 297 — 297 335 — 335 Total $ 4,458,836 $ — $ 4,458,836 $ 4,070,983 $ — $ 4,070,983 Three Months Ended Nine Months Ended Adjusted EBITDA September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023 Environmental Services $ 332,502 $ 288,982 $ 956,892 $ 822,949 Safety-Kleen Sustainability Solutions 41,226 31,146 122,402 126,024 Corporate Items (71,914 ) (65,111 ) (219,569 ) (191,312 ) Total $ 301,814 $ 255,017 $ 859,725 $ 757,661 View source version on businesswire.com: https://www.businesswire.com/news/home/20241029468697/en/Contacts Eric J. Dugas EVP and Chief Financial Officer Clean Harbors, Inc. 781.792.5100 InvestorRelations@cleanharbors.com Jim Buckley SVP Investor Relations Clean Harbors, Inc. 781.792.5100 Buckley.James@cleanharbors.com
Posts 12% Q3 Revenue Increase to $1.53 Billion, Led by Strength in Field Services Generates 26% Q3 Net Income Growth to $115.2 Million, or EPS of $2.12 Achieves 18% Growth in Q3 Adjusted EBITDA to $301.8 Million with Margin of 19.7% Revises Full-Year 2024 Adjusted EBITDA and Adjusted Free Cash Flow Guidance Commercial Launch of Kimball, Nebraska Incinerator Planned for November
Clean Harbors, Inc. (“Clean Harbors” or the “Company”) (NYSE: CLH), the leading provider of environmental and industrial services throughout North America, today announced financial results for the third quarter ended September 30, 2024. “We delivered profitable growth in both our operating segments while improving our consolidated Adjusted EBITDA margin by 100 basis points from the same period a year ago,” said Mike Battles, Co-Chief Executive Officer. “Underlying demand remained healthy across our Environmental Services (ES) segment. Despite higher Adjusted EBITDA, our Safety-Kleen Sustainability Solutions (SKSS) segment results reflected softer-than-expected demand and pricing of base oil and lubricants throughout the quarter with a more meaningful decline in September. We continue to prioritize safety with industry-leading results, achieving a Total Recordable Incident Rate (TRIR) of 0.69 year-to-date through September.” Third-Quarter 2024 Results Revenues grew 12% to $1.53 billion, compared with $1.37 billion in the same period of 2023. Income from operations increased 25% to $192.3 million, compared with $154.4 million in the third quarter of 2023. Net income was up 26% to $115.2 million, or $2.12 per diluted share, compared with $91.3 million, or $1.68 per diluted share, for the same period in 2023. Adjusted EBITDA (see description and reconciliation below) grew 18% to $301.8 million, compared with $255.0 million in the same period of 2023. Third-Quarter 2024 Segment Review “Our ES segment achieved a 13% increase in revenue and 15% growth in Adjusted EBITDA, which generated a 40-basis point improvement in segment margin. The third quarter marks our tenth consecutive quarter of year-over-year margin improvement in the ES segment,” said Eric Gerstenberg, Co-Chief Executive Officer. “ES growth was led by Field Services, which grew 68%, reflecting the HEPACO acquisition earlier this year and healthy organic growth in our legacy business. Technical Services revenue grew 8% on higher network volumes and pricing. Incineration utilization was 89% for the quarter, up from 86% in the same period a year ago. Average incineration pricing increased 6%. Safety-Kleen Environmental Services posted another consistent performance with 8% revenue growth in the ES segment. Our Industrial Services business experienced a difficult environment in Q3 resulting from weakness in the U.S. refinery space, where we saw work deferred and fall turnarounds scaled back given industry challenges in that vertical.” “SKSS results improved from the third quarter a year ago. Revenues grew 6%, reflecting the contribution of our Noble Oil acquisition in March, while Adjusted EBITDA increased 32%,” said Battles. “However, current supply overhangs in the base oil market resulted in lower demand and pricing pressure, which caused a weaker-than-anticipated EBITDA performance this quarter.” Business Outlook and Financial Guidance “As we enter the final quarter of 2024, the overall demand environment in North America is healthy, and the outlook for our ES segment is positive,” Gerstenberg said. “Favorable market dynamics, including reshoring, infrastructure spending, PFAS, and other regulatory changes should continue to fuel growth opportunities for Clean Harbors. We are meeting these opportunities with new capacity and capabilities. The commercial launch of our new incinerator in Kimball, Nebraska is scheduled for November, providing an essential outlet for additional hazardous waste volumes as it ramps up over the next 12-18 months. On the services side, the addition of HEPACO’s emergency response capabilities creates a foundation for continued growth in Field Services. We also expect our Technical Services and SK Environmental businesses to grow steadily, feeding volumes into Kimball and the other facilities in our network. In Industrial Services, we are taking actions to counter the weakness in fall turnarounds and look to return that business to revenue growth in 2025.” “Within SKSS, we remain committed to stabilizing our business amidst the current pricing challenges and weak demand for base oil. We are taking decisive actions to reduce production and collection costs while also pursuing growth initiatives in Group III, blended sales, and our partnership with Castrol. These programs have the potential to reduce the carbon footprints of businesses significantly, and we believe they will gain traction as more customers look to Safety-Kleen as their sustainability partner in the coming years,” Battles concluded. “Overall, despite some market obstacles related to base oil and refining customers, we expect to end 2024 with strong momentum across our network of disposal facilities and service offerings giving us a positive trajectory into 2025.” Based on its third-quarter performance and current forecast, Clean Harbors revised its full-year 2024 guidance and now expects: Adjusted EBITDA in the range of $1.10 billion to $1.12 billion, or a midpoint of $1.11 billion, which represents 10% growth year-over-year. This Adjusted EBITDA range is based on anticipated GAAP net income in the range of $375 million to $395 million. Adjusted free cash flow in the range of $280 million to $320 million, or a midpoint of $300 million, which includes spending related to the Kimball incinerator and the Company’s Baltimore expansion. The Company is revising this range due to its new Adjusted EBITDA guidance and increased short-term working capital levels. This new range is based on anticipated net cash from operating activities in the range of $680 million to $750 million. Non-GAAP Results Clean Harbors reports Adjusted EBITDA, which is a non-GAAP financial measure and should not be considered an alternative to net income or other measurements under generally accepted accounting principles (GAAP) but viewed only as a supplement to those measurements. Adjusted EBITDA is not calculated identically by all companies, and therefore the Company’s measurement of Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies. Clean Harbors believes that Adjusted EBITDA provides additional useful information to investors because the Company’s management routinely evaluates the performance of its businesses based upon levels of Adjusted EBITDA, which excludes certain expenses relating to transactions not reflective of our core operations, and because the Company’s loan covenants are based upon levels of Adjusted EBITDA achieved. The Company defines Adjusted EBITDA consistent with its existing revolving credit agreement, as described in the following reconciliation showing the differences between reported GAAP net income and Adjusted EBITDA for the three and nine months ended September 30, 2024 and 2023 (in thousands, except percentages): Three Months Ended Nine Months Ended September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023 Net income $ 115,213 $ 91,340 $ 318,325 $ 279,507 Accretion of environmental liabilities 3,618 3,388 10,139 10,281 Stock-based compensation 5,837 4,291 20,690 14,809 Depreciation and amortization 100,063 92,970 295,632 267,425 Other expense (income), net 1,123 (334 ) 2,431 833 Loss on early extinguishment of debt — — — 2,362 Interest expense, net of interest income 35,779 29,696 100,767 80,400 Provision for income taxes 40,181 33,666 111,741 102,044 Adjusted EBITDA $ 301,814 $ 255,017 $ 859,725 $ 757,661 Adjusted EBITDA Margin 19.7 % 18.7 % 19.3 % 18.6 % Adjusted Free Cash Flow Reconciliation Clean Harbors reports adjusted free cash flow, which is a non-GAAP financial measure that should not be considered an alternative to net cash from operating activities or other measurements under GAAP. The Company considers adjusted free cash flow to be a measurement of liquidity that provides useful information to investors about its ability to generate cash. The Company defines adjusted free cash flow as net cash from operating activities excluding cash impacts of items derived from non-operating activities, less additions to property, plant and equipment plus proceeds from sale and disposal of fixed assets. Adjusted free cash flow is not calculated identically by all companies, and therefore the Company’s measurement of adjusted free cash flow may not be comparable to similarly titled measures reported by other companies. An itemized reconciliation between reported GAAP net cash from operating activities and adjusted free cash flow is as follows for the three and nine months ended September 30, 2024 and 2023 (in thousands): Three Months Ended Nine Months Ended September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023 Adjusted free cash flow Net cash from operating activities $ 239,239 $ 220,119 $ 473,833 $ 455,692 Additions to property, plant and equipment (96,803 ) (107,608 ) (369,826 ) (311,906 ) Proceeds from sale and disposal of fixed assets 2,058 2,185 6,353 5,129 Adjusted free cash flow $ 144,494 $ 114,696 $ 110,360 $ 148,915 Adjusted EBITDA Guidance Reconciliation An itemized reconciliation between projected GAAP net income and projected Adjusted EBITDA is as follows (in millions): For the Year Ending December 31, 2024 Projected net income $375 to $395 Adjustments: Accretion of environmental liabilities 15 to 14 Stock-based compensation 27 to 30 Depreciation and amortization 405 to 395 Interest expense, net 145 to 140 Provision for income taxes 133 to 146 Projected Adjusted EBITDA $1,100 to $1,120 Adjusted Free Cash Flow Guidance Reconciliation An itemized reconciliation between projected GAAP net cash from operating activities and projected adjusted free cash flow is as follows (in millions): For the Year Ending December 31, 2024 Projected net cash from operating activities $680 to $750 Additions to property, plant and equipment (410) to (440) Proceeds from sale and disposal of fixed assets 10 to 10 Projected adjusted free cash flow $280 to $320 Conference Call Information Clean Harbors will conduct a conference call for investors today at 9:00 a.m. (ET) to discuss the information contained in this press release. During the call, management will discuss Clean Harbors’ financial results, business outlook and growth strategy. Investors who wish to listen to the webcast and view the accompanying slides should visit the Investor Relations section of the Company’s website at www.cleanharbors.com. The live call also can be accessed by dialing 877.709.8155 or 201.689.8881 prior to the start time. If you are unable to listen to the live conference call, the webcast will be archived on the Company’s website. About Clean Harbors Clean Harbors (NYSE: CLH) is North America’s leading provider of environmental and industrial services. The Company serves a diverse customer base, including a majority of Fortune 500 companies. Its customer base spans a number of industries, including chemical, manufacturing and refining, as well as numerous government agencies. These customers rely on Clean Harbors to deliver a broad range of services such as end-to-end hazardous waste management, emergency spill response, industrial cleaning and maintenance, and recycling services. Through its Safety-Kleen subsidiary, Clean Harbors also is a leading provider of parts washers and environmental services to commercial, industrial and automotive customers, as well as North America’s largest re-refiner and recycler of used oil. Founded in 1980 and based in Massachusetts, Clean Harbors operates in the United States, Canada, Mexico, Puerto Rico and India. For more information, visit www.cleanharbors.com. Safe Harbor Statement Any statements contained herein that are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are generally identifiable by use of the words “believes,” “expects,” “intends,” “anticipates,” “plans to,” “seeks,” “should,” “estimates,” “projects,” “may,” “likely,” “potential” or similar expressions. Such statements may include, but are not limited to, statements about the Company’s future financial and operating results, plans, strategy, objectives and goals, cost management initiatives, contingent liabilities, liquidity, business and market conditions, customer demand, acquisitions, growth opportunities, expectations, and other statements that are not historical facts. Such statements are based upon the beliefs and expectations of Clean Harbors’ management as of the date of this press release only and are subject to certain risks and uncertainties that could cause actual results to differ materially, including, without limitation, those items identified as “Risk Factors” in Clean Harbors’ most recently filed reports on Form 10-K and Form 10-Q. Forward-looking statements are neither historical facts nor assurances of future performance. Therefore, readers are cautioned not to place undue reliance on these forward-looking statements. Clean Harbors undertakes no obligation to revise or publicly release the results of any revision to these forward-looking statements other than through its filings with the Securities and Exchange Commission, which may be viewed in the “Investors” section of Clean Harbors’ website at www.cleanharbors.com. CLEAN HARBORS, INC. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) Three Months Ended Nine Months Ended September 30, September 30, 2024 2023 2024 2023 Revenues $ 1,529,422 $ 1,365,696 $ 4,458,836 $ 4,070,983 Cost of revenues (exclusive of items shown separately below) 1,055,599 943,951 3,062,211 2,822,977 Selling, general and administrative expenses 177,846 171,019 557,590 505,154 Accretion of environmental liabilities 3,618 3,388 10,139 10,281 Depreciation and amortization 100,063 92,970 295,632 267,425 Income from operations 192,296 154,368 533,264 465,146 Other (expense) income, net (1,123 ) 334 (2,431 ) (833 ) Loss on early extinguishment of debt — — — (2,362 ) Interest expense, net (35,779 ) (29,696 ) (100,767 ) (80,400 ) Income before provision for income taxes 155,394 125,006 430,066 381,551 Provision for income taxes 40,181 33,666 111,741 102,044 Net income $ 115,213 $ 91,340 $ 318,325 $ 279,507 Earnings per share: Basic $ 2.14 $ 1.69 $ 5.90 $ 5.17 Diluted $ 2.12 $ 1.68 $ 5.87 $ 5.14 Shares used to compute earnings per share - Basic 53,951 54,122 53,936 54,097 Shares used to compute earnings per share - Diluted 54,229 54,419 54,229 54,411 CLEAN HARBORS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) September 30, 2024 December 31, 2023 Current assets: (unaudited) Cash and cash equivalents $ 512,371 $ 444,698 Short-term marketable securities 82,371 106,101 Accounts receivable, net 1,100,660 983,111 Unbilled accounts receivable 204,308 107,859 Inventories and supplies 376,564 327,511 Prepaid expenses and other current assets 78,204 82,939 Total current assets 2,354,478 2,052,219 Property, plant and equipment, net 2,452,312 2,193,318 Other assets: Operating lease right-of-use assets 246,061 187,060 Goodwill 1,485,065 1,287,736 Permits and other intangibles, net 708,935 602,797 Other long-term assets 59,159 59,739 Total other assets 2,499,220 2,137,332 Total assets $ 7,306,010 $ 6,382,869 Current liabilities: Current portion of long-term debt $ 15,102 $ 10,000 Accounts payable 504,206 451,806 Deferred revenue 103,291 95,230 Accrued expenses and other current liabilities 398,236 397,157 Current portion of closure, post-closure and remedial liabilities 30,477 26,914 Current portion of operating lease liabilities 70,539 56,430 Total current liabilities 1,121,851 1,037,537 Other liabilities: Closure and post-closure liabilities, less current portion 105,375 105,044 Remedial liabilities, less current portion 94,384 97,885 Long-term debt, less current portion 2,773,659 2,291,717 Operating lease liabilities, less current portion 179,040 131,743 Deferred tax liabilities 356,150 353,107 Other long-term liabilities 147,241 118,330 Total other liabilities 3,655,849 3,097,826 Total stockholders’ equity, net 2,528,310 2,247,506 Total liabilities and stockholders’ equity $ 7,306,010 $ 6,382,869 CLEAN HARBORS, INC. AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Nine Months Ended September 30, 2024 September 30, 2023 Cash flows from operating activities: Net income $ 318,325 $ 279,507 Adjustments to reconcile net income to net cash from operating activities: Depreciation and amortization 295,632 267,425 Allowance for doubtful accounts 5,674 2,620 Amortization of deferred financing costs and debt discount 4,623 4,036 Accretion of environmental liabilities 10,139 10,281 Changes in environmental liability estimates 4,347 3,258 Deferred income taxes (418 ) (356 ) Other expense, net 2,431 833 Stock-based compensation 20,690 14,809 Loss on early extinguishment of debt — 2,362 Environmental expenditures (19,679 ) (24,064 ) Changes in assets and liabilities, net of acquisitions: Accounts receivable and unbilled accounts receivable (145,647 ) (46,445 ) Inventories and supplies (39,673 ) 12,691 Other current and long-term assets (47,826 ) (18,190 ) Accounts payable 30,004 (40,013 ) Other current and long-term liabilities 35,211 (13,062 ) Net cash from operating activities 473,833 455,692 Cash flows used in investing activities: Additions to property, plant and equipment (369,826 ) (311,906 ) Proceeds from sale and disposal of fixed assets 6,353 5,129 Acquisitions, net of cash acquired (474,011 ) (119,596 ) Proceeds from sale of business 750 750 Additions to intangible assets including costs to obtain or renew permits (2,545 ) (1,507 ) Purchases of available-for-sale securities (73,682 ) (104,329 ) Proceeds from sale of available-for-sale securities 100,021 84,390 Net cash used in investing activities (812,940 ) (447,069 ) Cash flows from (used in) financing activities: Change in uncashed checks (5,852 ) 3,004 Tax payments related to withholdings on vested restricted stock (11,514 ) (10,886 ) Repurchases of common stock (30,215 ) (18,000 ) Deferred financing costs paid (8,316 ) (6,371 ) Payments on finance leases (23,596 ) (11,594 ) Principal payments on debt (11,327 ) (621,475 ) Proceeds from issuance of debt, net of discount 499,375 500,000 Borrowing from revolving credit facility — 114,000 Payment on revolving credit facility — (114,000 ) Net cash from (used in) financing activities 408,555 (165,322 ) Effect of exchange rate change on cash (1,775 ) 61 Increase (decrease) in cash and cash equivalents 67,673 (156,638 ) Cash and cash equivalents, beginning of period 444,698 492,603 Cash and cash equivalents, end of period $ 512,371 $ 335,965 Supplemental information: Cash payments for interest and income taxes: Interest paid $ 134,177 $ 100,813 Income taxes paid, net of refunds 100,752 107,328 Non-cash investing activities: Property, plant and equipment accrued 43,604 29,127 ROU assets obtained in exchange for operating lease liabilities 98,927 61,741 ROU assets obtained in exchange for finance lease liabilities 53,391 26,317 Supplemental Segment Data (in thousands) Three Months Ended Revenue September 30, 2024 September 30, 2023 Third-Party Revenues Intersegment Revenues (Expenses), net Direct Revenues Third-Party Revenues Intersegment Revenues (Expenses), net Direct Revenues Environmental Services $ 1,287,650 $ 9,537 $ 1,297,187 $ 1,135,279 $ 11,084 $ 1,146,363 Safety-Kleen Sustainability Solutions 241,676 (9,537 ) 232,139 230,305 (11,084 ) 219,221 Corporate Items 96 — 96 112 — 112 Total $ 1,529,422 $ — $ 1,529,422 $ 1,365,696 $ — $ 1,365,696 Nine Months Ended Revenue September 30, 2024 September 30, 2023 Third-Party Revenues Intersegment Revenues (Expenses), net Direct Revenues Third-Party Revenues Intersegment Revenues (Expenses), net Direct Revenues Environmental Services $ 3,746,227 $ 32,853 $ 3,779,080 $ 3,357,743 $ 31,397 $ 3,389,140 Safety-Kleen Sustainability Solutions 712,312 (32,853 ) 679,459 712,905 (31,397 ) 681,508 Corporate Items 297 — 297 335 — 335 Total $ 4,458,836 $ — $ 4,458,836 $ 4,070,983 $ — $ 4,070,983 Three Months Ended Nine Months Ended Adjusted EBITDA September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023 Environmental Services $ 332,502 $ 288,982 $ 956,892 $ 822,949 Safety-Kleen Sustainability Solutions 41,226 31,146 122,402 126,024 Corporate Items (71,914 ) (65,111 ) (219,569 ) (191,312 ) Total $ 301,814 $ 255,017 $ 859,725 $ 757,661 View source version on businesswire.com: https://www.businesswire.com/news/home/20241029468697/en/
Eric J. Dugas EVP and Chief Financial Officer Clean Harbors, Inc. 781.792.5100 InvestorRelations@cleanharbors.com Jim Buckley SVP Investor Relations Clean Harbors, Inc. 781.792.5100 Buckley.James@cleanharbors.com
