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8-K - 8-K - CLEAN HARBORS INCa12-17908_18k.htm

Exhibit 99.1

 

Press Release

 

Clean Harbors Reports Second-Quarter 2012 Financial Results

 

·            Strong Environmental and Industrial Performance Drives 17% Revenue Growth to $523 Million

·            Reports Net Income of $23.4 Million; EPS of $0.44; EBITDA of $88.7 Million

·            Company Confirms Full-Year Guidance

 

Norwell, MA — August 8, 2012 Clean Harbors, Inc. (“Clean Harbors”) (NYSE: CLH), the leading provider of environmental, energy and industrial services throughout North America, today announced financial results for the second quarter ended June 30, 2012.

 

Revenues for the second quarter grew 17% to $523.1 million from $447.2 million in the same period in 2011, reflecting a combination of organic growth and contributions from 2011 acquisitions.  For the first six months of 2012, revenue grew 24% to $1.1 billion from $882.2 million in the same period in 2011. Income from operations in the second quarter of 2012 decreased to $47.5 million from $51.9 million in the same period of 2011 primarily based on a 44% increase in depreciation and amortization mostly related to the acquisitions completed in 2011. For the first six months of 2012, income from operations increased 19% to $109.2 million from $91.6 million in the first six months of 2011.

 

Second quarter 2012 net income was $23.4 million, or $0.44 per diluted share, compared with $29.2 million, or $0.55 per diluted share, in the second quarter of 2011.  The effective tax rate in the second quarter of 2012 was 35.8% compared with 33.9% in the same period of last year. The second quarter of 2011 also included a $2.9 million pre-tax benefit related to the disposition of marketable securities.  Net income for the first six months of 2012 increased to $55.4 million, or $1.04 per diluted share, compared with $51.9 million, or $0.97 per diluted share.

 

EBITDA (see description below) increased 9% to $88.7 million in the second quarter of 2012 compared with $81.2 million in the same period of 2011. For the first six months of 2012, EBITDA grew 27% to $189.6 million from $148.8 million in the same period of 2011.

 

Comments on the Second Quarter

 

“Our Environmental and Industrial businesses delivered strong results in the second quarter while our Energy business was affected by the seasonal slowdown due to the Spring break-up in Western Canada and the extended wet weather conditions in the quarter. In the U.S., with the depressed natural gas prices, the Company focused on the repositioning of its solids control assets and rental equipment toward liquid rich gas and oil plays,” said Alan S. McKim, Chairman and Chief Executive Officer. “We view the slowdown in the U.S. Energy business as temporary and expect to be fully utilized again by the fourth quarter.  Therefore, we are reiterating our 2012 guidance and we believe that growth across our business lines in the second half will enable us to achieve our full-year financial targets.”

 

GRAPHIC

 

42 Longwater Drive · P.O. Box 9149 · Norwell, Massachusetts 02061-9149 · 781.792.5000 · www.cleanharbors.com

 



 

“Despite the near-term softness in our Energy business, we delivered 17% growth in the quarter as our Environmental business benefited from strong volumes and our Industrial business experienced high levels of activity,” McKim said.  “Within our Technical Services segment, utilization at our incinerators surpassed 90% for the quarter, even with 17% more down days due to turnarounds as compared to last year’s second quarter.  Volumes at our landfills increased by 60% from the prior year as we recorded the second highest quarterly volume in our history.  Despite no major emergency response events in the quarter, our Field Services segment grew 9% from the prior year as large-scale projects and steady maintenance work continued to drive growth.  Our Industrial Services segment increased 27% from a year ago as our specialty services remained in high demand, oil sands activity continued to be strong and our lodging business delivered another outstanding quarter.”

 

Non-GAAP Results

 

Clean Harbors reports EBITDA results, which are non-GAAP financial measures, as a complement to results provided in accordance with accounting principles generally accepted in the United States (GAAP) and believes that such information provides additional useful information to investors since the Company’s loan covenants are based upon levels of EBITDA achieved.  The Company defines EBITDA in accordance with its existing credit agreement, as described in the following reconciliation showing the differences between reported net income and EBITDA for the second quarter and first six months of 2012 and 2011 (in thousands):

 

 

 

For the three months ended:

 

For the six months ended:

 

 

 

June 30, 2012

 

June 30, 2011

 

June 30, 2012

 

June 30, 2011

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

23,426

 

$

29,156

 

$

55,441

 

$

51,886

 

Accretion of environmental liabilities

 

2,505

 

2,407

 

4,921

 

4,796

 

Depreciation and amortization

 

38,663

 

26,936

 

75,494

 

52,396

 

Other expense (income)

 

75

 

(2,868

)

374

 

(5,767

)

Interest expense, net

 

10,968

 

10,642

 

22,240

 

17,120

 

Provision for income taxes

 

13,064

 

14,954

 

31,179

 

28,387

 

EBITDA

 

$

88,701

 

$

81,227

 

$

189,649

 

$

148,818

 

 

Business Outlook and Financial Guidance

 

“We remain encouraged by our overall prospects for 2012,” McKim said. “Positive industry trends continue to support our outlook in each of our four segments.  Within Environmental, we are entering our strongest quarter with significant momentum across key verticals for both our Technical and Field Services segments.  Within our Industrial Services segment, we are experiencing consistent demand for our services, a number of cross-selling opportunities and solid bookings for our lodging business. Within our Oil & Gas Field Services segment, with the completion of the Spring break-up and wet season in Western Canada, we are seeing a

 



 

considerable pickup in activity and projects that were delayed have been restarted.  At the same time, the shift in the marketplace to liquid-rich plays continues and we are aggressively redeploying our surface rentals equipment to capitalize on this trend.  We anticipate that this process will be completed during the fourth quarter.”

 

“As we enter the second half of the year, we are well-capitalized having successfully raised $800 million at favorable interest rates in a recent unsecured notes offering, which was partly used to repay our outstanding secured notes.  We expect to execute a number of growth-oriented internal investments in the second half of the year and remain committed to our full-year capex target of $180 million.  With more than $500 million in available cash and equivalents today, we also continue to be active in our pursuit of value-adding acquisitions.  We are currently evaluating potential acquisitions of various sizes within all four of our operating segments to strengthen our leadership position and to help extend our growth momentum in 2012 and beyond,” McKim concluded.

 

Based on its year-to-date performance and current market conditions, Clean Harbors is reiterating its 2012 annual revenue and EBITDA guidance.  The Company continues to expect 2012 revenues in the range of $2.20 billion to $2.25 billion.  For 2012, the Company continues to expect EBITDA in the range of $400 million to $410 million. The Company’s 2012 guidance implies an EBITDA margin of greater than 18% for the full year.  This guidance is exclusive of any potential future acquisitions.

 

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.  On the call, management will discuss Clean Harbors’ financial results, business outlook and growth strategy.

 

Investors who wish to listen to the webcast should visit the Investor Relations section of the Company’s website at www.cleanharbors.com.  The live call also can be accessed by dialing 201.689.8881 or 877.709.8155 prior to the start of the call.  If you are unable to listen to the live call, the webcast will be archived on the Company’s website.

 

About Clean Harbors

 

Clean Harbors is the leading provider of environmental, energy and industrial services throughout North America.  The Company serves more than 60,000 customers, including a majority of the Fortune 500 companies, thousands of smaller private entities and numerous federal, state, provincial and local governmental agencies.

 



 

Headquartered in Norwell, Massachusetts, Clean Harbors has more than 200 locations, including over 50 waste management facilities, throughout North America in 37 U.S. states, seven Canadian provinces, Mexico and Puerto Rico.  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,” “estimates,” “projects,” or similar expressions.  Such statements may include, but are not limited to, statements about the Company’s business outlook and financial guidance and other statements that are not historical facts.  Such statements are based upon the beliefs and expectations of Clean Harbors’ management as of this date 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 the Company’s most recently filed Form 10-K and Form 10-Q. Therefore, readers are cautioned not to place undue reliance on these forward-looking statements.  The Company undertakes no obligation to revise or publicly release the results of any revision to these forward-looking statements other than through its various filings with the Securities and Exchange Commission, which may be viewed in the “Investors” section of the Company’s website at www.cleanharbors.com.

 

Contacts:

 

James M. Rutledge

Jim Buckley

Vice Chairman and Chief Financial Officer

Executive Vice President

Clean Harbors, Inc.

Sharon Merrill Associates

781.792.5100

617.542.5300

InvestorRelations@cleanharbors.com

clh@investorrelations.com

 



 

CLEAN HARBORS, INC. AND SUBSIDIARIES

 

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

 

(in thousands except per share amounts)

 

 

 

For the three months ended:

 

For the six months ended:

 

 

 

June 30,

 

June 30,

 

June 30,

 

June 30,

 

 

 

2012

 

2011

 

2012

 

2011

 

Revenues

 

$

523,118

 

$

447,235

 

$

1,095,140

 

$

882,197

 

Cost of revenues (exclusive of items shown separately below)

 

367,623

 

307,754

 

767,938

 

620,331

 

Selling, general and administrative expenses

 

66,794

 

58,254

 

137,553

 

113,048

 

Accretion of environmental liabilities

 

2,505

 

2,407

 

4,921

 

4,796

 

Depreciation and amortization

 

38,663

 

26,936

 

75,494

 

52,396

 

Income from operations

 

47,533

 

51,884

 

109,234

 

91,626

 

Other (expense) income

 

(75

)

2,868

 

(374

)

5,767

 

Interest expense, net

 

(10,968

)

(10,642

)

(22,240

)

(17,120

)

Income before provision for income taxes

 

36,490

 

44,110

 

86,620

 

80,273

 

Provision for income taxes

 

13,064

 

14,954

 

31,179

 

28,387

 

Net income

 

$

23,426

 

$

29,156

 

$

55,441

 

$

51,886

 

Earnings per share:

 

 

 

 

 

 

 

 

 

Basic

 

$

0.44

 

$

0.55

 

$

1.04

 

$

0.98

 

Diluted

 

$

0.44

 

$

0.55

 

$

1.04

 

$

0.97

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

53,308

 

52,939

 

53,268

 

52,869

 

Weighted average common shares outstanding plus potentially dilutive common shares

 

53,505

 

53,362

 

53,497

 

53,261

 

 



 

CLEAN HARBORS, INC. AND SUBSIDIARIES

 

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

 

ASSETS

 

(in thousands)

 

 

 

June 30,

 

December 31,

 

 

 

2012

 

2011

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

296,758

 

$

260,723

 

Marketable securities

 

9,701

 

111

 

Accounts receivable, net

 

397,453

 

449,553

 

Unbilled accounts receivable

 

30,173

 

29,385

 

Deferred costs

 

7,273

 

5,903

 

Prepaid expenses and other current assets

 

49,763

 

73,349

 

Supplies inventories

 

57,782

 

56,242

 

Deferred tax assets

 

16,605

 

16,602

 

Total current assets

 

865,508

 

891,868

 

 

 

 

 

 

 

Property, plant and equipment, net

 

955,040

 

903,947

 

 

 

 

 

 

 

Other assets:

 

 

 

 

 

Long-term investments

 

4,326

 

4,245

 

Deferred financing costs

 

12,152

 

13,607

 

Goodwill

 

135,962

 

122,392

 

Permits and other intangibles, net

 

138,622

 

139,644

 

Other

 

10,604

 

10,100

 

Total other assets

 

301,666

 

289,988

 

Total assets

 

$

2,122,214

 

$

2,085,803

 

 



 

CLEAN HARBORS, INC. AND SUBSIDIARIES

 

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

(in thousands)

 

 

 

June 30,

 

December 31,

 

 

 

2012

 

2011

 

Current liabilities:

 

 

 

 

 

Current portion of capital lease obligations

 

$

6,322

 

$

8,310

 

Accounts payable

 

172,657

 

178,084

 

Deferred revenue

 

32,015

 

32,297

 

Accrued expenses

 

130,526

 

147,992

 

Current portion of closure, post-closure and remedial liabilities

 

19,801

 

15,059

 

Total current liabilities

 

361,321

 

381,742

 

Other liabilities:

 

 

 

 

 

Closure and post-closure liabilities, less current portion

 

29,140

 

30,996

 

Remedial liabilities, less current portion

 

118,563

 

124,146

 

Long-term obligations

 

523,481

 

524,203

 

Capital lease obligations, less current portion

 

4,482

 

6,375

 

Unrecognized tax benefits and other long-term liabilities

 

124,327

 

117,354

 

Total other liabilities

 

799,993

 

803,074

 

Total stockholders’ equity, net

 

960,900

 

900,987

 

Total liabilities and stockholders’ equity

 

$

2,122,214

 

$

2,085,803