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Exhibit 99.1

 

Press Release

 

Clean Harbors Reports Fourth-Quarter and

Year-End 2012 Financial Results

 

·            Company Achieves Q4 Revenue of $559 Million and $2.19 Billion for 2012

 

·            2012 Net Income of $129.7 Million Reflects Release of Unrecognized Tax Benefits

 

·            Adjusted EBITDA Increases 7% in 2012 to $373.8 Million

 

·            Company Confirms 2013 Annual Guidance

 

Norwell, Mass. — February 20, 2013 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 fourth quarter and year ended December 31, 2012.

 

Revenues for the fourth quarter increased to $559.0 million compared with $545.9 million in the same period in 2011.  Income from operations in the fourth quarter of 2012 decreased to $36.2 million from $59.2 million in the same period of 2011 primarily based on costs associated with the Safety-Kleen acquisition and an increase in depreciation and amortization expense.

 

Fourth quarter 2012 net income was $61.9 million, or $1.11 per diluted share, compared with $38.2 million, or $0.72 per diluted share, in the fourth quarter of 2011.  Fourth-quarter 2012 net income included a $52.4 million benefit from the release of unrecognized tax benefits due to expired statute of limitation periods, partially offset by approximately $7.5 million (net of tax) in costs related to the Safety-Kleen acquisition.  Adjusted EBITDA (see description below) in the fourth quarter of 2012, which includes the costs related to Safety-Kleen, was $83.6 million compared with $97.4 million in the same period of 2011.

 

Comments on the Fourth Quarter

 

“We achieved year-over-year revenue growth in the fourth quarter as strong contributions in our Industrial Services and Field Services segments offset a slowdown in our Oil & Gas Field Services segment,” said Alan S. McKim, Chairman and Chief Executive Officer. “Our margins in the quarter were affected by both external and internal costs associated with our $1.25 billion acquisition of Safety-Kleen, which we completed in late December.  Our bottom-line benefited from the reversal of reserves we had previously accrued related to unrecognized tax benefits.”

 

“Within our operating segments, Technical Services had a solid quarter with 90% utilization at our incineration facilities and very high landfill volumes, driven again by Bakken-related work and large-scale projects,” McKim said.  “Field Services generated double-digit growth in its base business, along with approximately $12 million in clean-up work associated with Hurricane Sandy.  Within Industrial Services, lodging, specialty services and Oil Sands-related work all contributed to a strong quarterly performance in this segment.  Within Oil & Gas Field Services, the winter drilling season was not as robust as the same period in 2011 with lower rig counts in Western Canada and margin pressure in the U.S. related to the shift away from natural gas.”

 

GRAPHIC

 

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

 



 

Press Release

 

Clean Harbors Reports Fourth-Quarter and

Year-End 2012 Financial Results

 

Full-Year 2012 Results

 

Revenues for 2012 increased 10% to a record $2.19 billion from $1.98 billion in 2011.  Income from operations in 2012 was $202.2 million compared with $217.7 million in 2011.  2012 net income was $129.7 million, or $2.40 per diluted share, compared with $127.3 million, or $2.39 per diluted share, in 2011.  Adjusted EBITDA (see description below) increased 7% in 2012 to a record $373.8 million from $350.0 million for 2011.

 

“In 2012, we again achieved double-digit growth and delivered Adjusted EBITDA margins (Adjusted EBITDA divided by revenues) for the year of 17%,” McKim said.  “A number of our businesses — ranging from landfills to turnaround services to lodging — generated record results in 2012, which offset some of the near-term challenges we experienced in the energy space.  With the completion of the Safety-Kleen acquisition at year-end, we exited 2012 with significant momentum and many exciting growth opportunities.”

 

Business Outlook and Financial Guidance

 

“Our outlook for 2013 and beyond is enhanced by our acquisition of Safety-Kleen in late December,” McKim said. “Safety-Kleen brings well-established leadership positions in several important lines of business, including parts cleaning, small quantity waste generators, used oil collection and recycling. The transaction significantly broadens our portfolio of services and will generate a substantial increase in disposal volumes.  The addition of Safety-Kleen also enhances our commitment to sustainability and enables us to capitalize on the growing demand for recycled products including re-refined oil.  We remain confident that this acquisition will enhance our cash flow generation going forward and build significant long-term value for our shareholders.”

 

“Following the completion of the Safety-Kleen acquisition, we are aggressively moving forward with our integration plans,” McKim said. “Our integration teams are identifying areas where we believe we can reduce costs and improve efficiencies by streamlining functions. Through reductions in redundant headcount, increased asset utilization and economies of scale in areas such as procurement and IT, we are currently targeting $60 to $65 million in acquisition-related synergies in 2013 — up from our previously announced target of $30 million.  At the same time, we are seeing a near-term pricing imbalance in the Group 2 lubricants market.  These additional costs savings will help offset this pricing pressure.  We are confident that we can leverage the operational efficiencies of our combined organization to further enhance the long-term profitability of Clean Harbors.”

 

“Looking ahead, we are optimistic about our overall prospects for profitable growth based on favorable industry trends.  We see substantial cross-selling and long-term growth opportunities within each of our segments.  Within Technical Services and Field Services, we have a healthy pipeline of ongoing and potential projects that should continue to drive considerable waste volumes into our disposal network.  Throughout 2012, our Industrial Services business consistently delivered strong results based on steady demand, and we

 

GRAPHIC

 

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

 



 

Press Release

 

Clean Harbors Reports Fourth-Quarter and

Year-End 2012 Financial Results

 

expect that to continue in the coming year.  Our Oil & Gas Field Services segment is well-positioned to rebound from the slowdown we experienced in 2012 as the transformation and growth of the North American energy market continues in the years ahead,” McKim concluded.

 

Based on its 2012 performance and current market conditions, Clean Harbors is confirming its previously announced 2013 annual revenue and Adjusted EBITDA guidance.  The Company continues to expect 2013 revenues in the range of $3.72 billion to $3.77 billion.  For 2013, the Company expects Adjusted EBITDA in the range of $605 million to $620 million.  A reconciliation of the Company’s Adjusted EBITDA guidance to net income guidance is included below.  The Company’s full-year Adjusted EBITDA guidance excludes an estimated $20 million of one-time non-cash acquisition-related fair value adjustments to inventory values and deferred revenue to be amortized in the Company’s first-quarter results.

 

Non-GAAP Results

 

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

 

 

 

For the three months ended:

 

For the year ended:

 

 

 

December 31,
2012

 

December 31,
2011

 

December 31,
2012

 

December 31,
2011

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

61,874

 

$

38,233

 

$

129,674

 

$

127,252

 

Accretion of environmental liabilities

 

2,508

 

2,449

 

9,917

 

9,680

 

Depreciation and amortization

 

44,852

 

35,663

 

161,646

 

122,663

 

Other expense (income)

 

337

 

(471

)

802

 

(6,402

)

Loss on early extinguishment of debt

 

 

 

26,385

 

 

Interest expense, net

 

13,451

 

11,342

 

47,287

 

39,389

 

(Benefit) provision for income taxes

 

(39,431

)

10,143

 

(1,944

)

57,426

 

Adjusted EBITDA

 

$

83,591

 

$

97,359

 

$

373,767

 

$

350,008

 

 

GRAPHIC

 

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

 



 

Press Release

 

Clean Harbors Reports Fourth-Quarter and

Year-End 2012 Financial Results

 

Adjusted EBITDA Guidance Reconciliation

 

An itemized reconciliation between projected net income and projected Adjusted EBITDA is as follows:

 

 

 

For the Year Ended December 31, 2013

 

 

 

Amount

 

Margin % (1)

 

 

 

(In millions)

 

 

 

Projected GAAP net income

 

$

141

 

to

 

$

164

 

3.8

%

to

 

4.3

%

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of acquisition-related fair value adjustments to inventory and deferred revenue

 

20

 

to

 

20

 

0.5

%

to

 

0.5

%

Accretion of environmental liabilities

 

13

 

to

 

11

 

0.4

%

to

 

0.3

%

Depreciation and amortization

 

265

 

to

 

255

 

7.1

%

to

 

6.8

%

Other (income) expense

 

 

to

 

 

0.0

%

to

 

0.0

%

Loss on early extinguishment of debt

 

 

to

 

 

0.0

%

to

 

0.0

%

Interest expense, net

 

79

 

to

 

78

 

2.1

%

to

 

2.1

%

Provision for income taxes

 

87

 

to

 

92

 

2.4

%

to

 

2.4

%

Projected Adjusted EBITDA

 

$

605

 

to

 

$

620

 

16.3

%

to

 

16.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues (In millions)

 

$

3,720

 

to

 

$

3,770

 

 

 

 

 

 

 

 


(1)   The Margin % indicates the percentage that the line-item represents to total revenues for the respective reporting period, calculated by dividing the dollar amount for the line-item by total revenues for the reporting period.

 

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.

 

GRAPHIC

 

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

 



 

Press Release

 

Clean Harbors Reports Fourth-Quarter and

Year-End 2012 Financial Results

 

About Clean Harbors

 

Clean Harbors (NYSE: CLH) is the leading provider of environmental, energy and industrial services throughout North America.  The Company serves a diverse customer base, including a majority of the Fortune 500 companies, thousands of smaller private entities and numerous federal, state, provincial and local governmental agencies. Through its Safety-Kleen subsidiary, Clean Harbors also is a premier provider of used oil recycling and re-refining, parts cleaning and environmental services for the small quantity generator market.

 

Headquartered in Massachusetts, Clean Harbors has waste disposal facilities and service locations throughout the United States and Canada, as well as 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 benefits of the acquisition of Safety-Kleen, including future financial and operating results, the combined company’s plans, objectives, expectations and intentions 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 Clean Harbors’ most recently filed Form 10-K and Form 10-Q. 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.

 

Contacts:

 

 

 

 

 

James M. Rutledge

 

Jim Buckley

Vice Chairman, President 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

 

GRAPHIC

 

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

 



 

Press Release

 

Clean Harbors Reports Fourth-Quarter and

Year-End 2012 Financial Results

 

CLEAN HARBORS, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

(in thousands except per share amounts)

 

 

 

For the three months ended:

 

For the year ended:

 

 

 

December 31,

 

December 31,

 

December 31,

 

December 31,

 

 

 

2012

 

2011

 

2012

 

2011

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

558,962

 

$

545,886

 

$

2,187,908

 

$

1,984,136

 

Cost of revenues (exclusive of items shown separately below)

 

399,743

 

373,142

 

1,540,621

 

1,379,991

 

Selling, general and administrative expenses

 

75,628

 

75,385

 

273,520

 

254,137

 

Accretion of environmental liabilities

 

2,508

 

2,449

 

9,917

 

9,680

 

Depreciation and amortization

 

44,852

 

35,663

 

161,646

 

122,663

 

Income from operations

 

36,231

 

59,247

 

202,204

 

217,665

 

Other (expense) income

 

(337

)

471

 

(802

)

6,402

 

Loss on early extinguishment of debt

 

 

 

(26,385

)

 

Interest (expense), net

 

(13,451

)

(11,342

)

(47,287

)

(39,389

)

Income before (benefit) provision for income taxes

 

22,443

 

48,376

 

127,730

 

184,678

 

(Benefit) provision for income taxes

 

(39,431

)

10,143

 

(1,944

)

57,426

 

Net income

 

$

61,874

 

$

38,233

 

$

129,674

 

$

127,252

 

Earnings per share:

 

 

 

 

 

 

 

 

 

Basic

 

$

1.11

 

$

0.72

 

$

2.41

 

$

2.40

 

Diluted

 

$

1.11

 

$

0.72

 

$

2.40

 

$

2.39

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

55,614

 

53,081

 

53,884

 

52,931

 

Weighted average common shares outstanding plus potentially dilutive common shares

 

55,746

 

53,401

 

54,079

 

53,324

 

 

GRAPHIC

 

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

 



 

Press Release

 

Clean Harbors Reports Fourth-Quarter and

Year-End 2012 Financial Results

 

CLEAN HARBORS, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

ASSETS

(in thousands)

 

 

 

December 31,

 

December 31,

 

 

 

2012

 

2011

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

229,836

 

$

260,723

 

Marketable securities

 

11,778

 

111

 

Accounts receivable, net

 

541,423

 

449,553

 

Unbilled accounts receivable

 

27,072

 

29,385

 

Deferred costs

 

6,888

 

5,903

 

Prepaid expenses and other current assets

 

75,778

 

73,349

 

Supplies inventories

 

171,441

 

56,242

 

Deferred tax assets

 

22,577

 

16,602

 

Total current assets

 

1,086,793

 

891,868

 

 

 

 

 

 

 

Property, plant and equipment, net

 

1,531,763

 

903,947

 

 

 

 

 

 

 

Other assets:

 

 

 

 

 

Long-term investments

 

4,354

 

4,245

 

Deferred financing costs

 

21,657

 

13,607

 

Goodwill

 

593,771

 

122,392

 

Permits and other intangibles, net

 

572,817

 

139,644

 

Other

 

14,651

 

10,100

 

Total other assets

 

1,207,250

 

289,988

 

Total assets

 

$

3,825,806

 

$

2,085,803

 

 

GRAPHIC

 

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

 



 

Press Release

 

Clean Harbors Reports Fourth-Quarter and

Year-End 2012 Financial Results

 

CLEAN HARBORS, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

LIABILITIES AND STOCKHOLDERS’ EQUITY

(in thousands)

 

 

 

December 31,

 

December 31,

 

 

 

2012

 

2011

 

Current liabilities:

 

 

 

 

 

Current portion of capital lease obligations

 

$

5,092

 

$

8,310

 

Accounts payable

 

256,468

 

178,084

 

Deferred revenue

 

50,942

 

32,297

 

Accrued expenses

 

232,429

 

147,992

 

Current portion of closure, post-closure and remedial liabilities

 

24,121

 

15,059

 

Total current liabilities

 

569,052

 

381,742

 

Other liabilities:

 

 

 

 

 

Closure and post-closure liabilities, less current portion

 

45,457

 

30,996

 

Remedial liabilities, less current portion

 

151,890

 

124,146

 

Long-term obligations

 

1,400,000

 

524,203

 

Capital lease obligations, less current portion

 

2,879

 

6,375

 

Unrecognized tax benefits and other long-term liabilities

 

224,456

 

117,354

 

Total other liabilities

 

1,824,682

 

803,074

 

Total stockholders’ equity, net

 

1,432,072

 

900,987

 

Total liabilities and stockholders’ equity

 

$

3,825,806

 

$

2,085,803

 

 

GRAPHIC

 

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

 



 

Press Release

 

Clean Harbors Reports Fourth-Quarter and

Year-End 2012 Financial Results

 

Supplemental Segment Data (in thousands)

 

 

 

For the three months ended:

 

For the twelve months ended:

 

Revenue

 

December 31,
2012

 

December 31,
2011

 

December 31,
2012

 

December 31,
2011

 

 

 

 

 

 

 

 

 

 

 

Technical Services

 

$

238,901

 

$

235,006

 

$

937,754

 

$

885,374

 

Field Services

 

75,720

 

57,214

 

239,968

 

260,312

 

Industrial Services

 

142,760

 

125,633

 

581,648

 

469,950

 

Oil & Gas Field Services

 

101,812

 

127,778

 

428,932

 

369,190

 

Corporate Items

 

(231

)

255

 

(394

)

(690

)

Total

 

$

558,962

 

$

545,886

 

$

2,187,908

 

$

1,984,136

 

 

Non-GAAP Results

 

Clean Harbors reports Adjusted EBITDA results, which is a non-GAAP financial measure, 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 Adjusted EBITDA achieved.  The Company defines Adjusted EBITDA in accordance with its existing credit agreement.  See “Non-GAAP Results” for a reconciliation of the Company’s total Adjusted EBITDA to GAAP net income.

 

 

 

For the three months ended:

 

For the twelve months ended:

 

Adjusted EBITDA

 

December 31,
2012

 

December 31,
2011

 

December 31,
2012

 

December 31,
2011

 

 

 

 

 

 

 

 

 

 

 

Technical Services

 

$

60,115

 

$

61,641

 

$

244,989

 

$

235,674

 

Field Services

 

9,488

 

7,625

 

25,087

 

39,152

 

Industrial Services

 

32,471

 

25,905

 

139,923

 

103,535

 

Oil & Gas Field Services

 

14,848

 

30,635

 

75,809

 

76,383

 

Corporate Items

 

(33,331

)

(28,447

)

(112,041

)

(104,736

)

Total

 

$

83,591

 

$

97,359

 

$

373,767

 

$

350,008

 

 

GRAPHIC

 

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