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Exhibit 99.1

 

Press Release

 

Clean Harbors Reports Third-Quarter 2013 Financial Results

 

 

·            Growth Across Multiple Segments Drives Revenue of $907.5 Million

·            Company Reports EPS of $0.58 and Adjusted EBITDA of $146 Million

·            On Track for More Than $70 Million in Safety-Kleen Cost Synergies in 2013

·            Confirms 2013 Revenue Guidance and Revises Adjusted EBITDA Guidance

·            Provides Preliminary 2014 Guidance

 

Norwell, Mass. — November 6, 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 third quarter ended September 30, 2013.

 

Results for 2013 reflect the December 2012 acquisition of Safety-Kleen.  Revenues for the third quarter of 2013 increased 70% to $907.5 million, compared with $533.8 million in the same period in 2012.  Income from operations in the third quarter of 2013 increased 30% to $73.6 million from $56.7 million in the same period of 2012, which includes a 68% increase in depreciation and amortization expense.

 

Third-quarter 2013 net income was $35.4 million, or $0.58 per diluted share, compared with $12.4 million, or $0.23 per diluted share, in the third quarter of 2012. The Company’s third-quarter 2013 net income includes approximately $2.7 million in pre-tax integration and severance costs. The third quarter of 2012 included a $26.4 million pre-tax charge related to senior debt refinancing. The effective tax rate in the third quarter of 2013 was 34.7%, compared with 33.8% in the same period of last year.

 

Adjusted EBITDA (see description below) in the third quarter of 2013 increased 45% to $146.0 million, compared with $100.5 million in the same period of 2012. Third-quarter 2013 Adjusted EBITDA includes the $2.7 million in pre-tax integration and severance costs.

 

Comments on the Third Quarter

 

“In the third quarter, we exceeded $900 million in quarterly revenue for the first time in our history,” said Alan S. McKim, Chairman and Chief Executive Officer. “The 70% year-over-year growth was not only driven by the addition of Safety-Kleen but by a solid performance in our legacy business.  Our Technical Services and Industrial and Field Services segments each achieved double-digit growth compared with a year ago. At the same time, our Oil and Gas Field Services segment had a strong quarter, growing 27% over the same period in 2012. Within Safety-Kleen, our Oil Re-refining and Recycling segment rebounded from a soft second quarter with higher total volume of base oil and blended oil sales, improved pricing and increased sales of byproducts.”

 

“From a margin perspective, we delivered third-quarter Adjusted EBITDA of just over 16% in the third quarter.  This is down from the 18.8% we achieved in the third quarter a year ago as Safety-Kleen continues to

 

GRAPHIC

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

 

 



 

Press Release

 

Clean Harbors Reports Third-Quarter 2013 Financial Results

 

 

weigh on our margins in the near-term.  However, we continued to deliver significant sequential margin improvement compared with the 11.3% we reported in the first quarter and 14.4% in the second quarter.  This quarter’s solid performances in Technical Services and Oil and Gas Field Services were partly offset by some margin weakness in SK Environmental Services. Within Technical Services, incineration utilization surpassed 93% in the quarter and we generated an increase in landfill activity due to a rise in large-scale project volumes. Within Oil and Gas Field Services, Adjusted EBITDA increased by nearly 50% from a year ago, reflecting an increase in our seismic business in Western Canada, as well as flood and oil-spill cleanup work in the region.”

 

“For Safety-Kleen, we achieved more than $25 million in cost synergies in the third quarter, bringing our year-to-date total to more than $47 million. We remain on track to achieve our targeted range of 2013 cost synergies of $70 million to $75 million, which will translate into $100 million in annualized cost synergies in 2014.”

 

Business Outlook and Financial Guidance

 

“Looking ahead, we anticipate a solid finish to 2013 and continued growth momentum entering 2014.  Our Technical Services segment has been consistently achieving high utilization levels and steady volumes, with strong contributions resulting from our acquisition of Safety-Kleen. Within the Industrial and Field Services segment, we continue to play a key role in Western Canada, particularly in the Oil Sands region, where we will benefit from the recent opening of our Ruth Lake lodge, which had been previously delayed by flooding and adverse weather. Our Oil and Gas Field Services segment is heading into the Canadian winter drilling season with a steady pipeline of potential projects and good prospects for expansion in the U.S. Within the Oil Re-refining and Recycling segment, the acquisition of Evergreen Oil in California — along with recent increases in our base oil and blended products — positions us for profitable growth. The outlook for our SK Environmental Services segment is positive as we intend to reinvigorate profitable growth in that business through cross-selling initiatives and capturing additional efficiencies,” McKim concluded.

 

Based on its year-to-date performance and current market conditions, Clean Harbors is maintaining its previously announced 2013 annual revenue guidance and revising its previously announced Adjusted EBITDA range. The Company continues to expect 2013 revenues in the range of $3.50 billion to $3.55 billion.  The Company currently expects Adjusted EBITDA in the range of $523 million to $528 million, compared with its previous guidance of $535 million to $545 million, primarily as a result of the delayed opening of the Ruth Lake lodge and lower-than-expected Adjusted EBITDA contributions from the Oil Sands region in the second half.

 

Based upon preliminary estimates of the markets it serves, the Company currently expects 2014 revenues in the range of $3.7 billion to $3.8 billion.  With this level of growth, the Company expects its 2014 Adjusted EBITDA to be in a range of $610 million to $640 million.  This guidance is exclusive of any potential

 

GRAPHIC

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

 



 

Press Release

 

Clean Harbors Reports Third-Quarter 2013 Financial Results

 

 

future acquisitions. A reconciliation of the Company’s Adjusted EBITDA guidance to net income guidance for 2013 and 2014 is included below.

 

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 third quarter and first nine months of 2013 and 2012 (in thousands):

 

 

 

For the Three Months Ended:

 

For the Nine Months Ended:

 

 

 

September 30,
2013

 

September 30,
2012

 

September 30,
2013

 

September 30,
2012

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

35,361

 

$

12,359

 

$

68,765

 

$

67,800

 

Accretion of environmental liabilities

 

2,914

 

2,488

 

8,628

 

7,409

 

Depreciation and amortization

 

69,430

 

41,300

 

196,904

 

116,794

 

Other expense (income)

 

150

 

91

 

(2,030

)

465

 

Loss on early extinguishment of debt

 

 

26,385

 

 

26,385

 

Interest expense, net

 

19,326

 

11,596

 

58,784

 

33,836

 

Pre-tax, non-cash acquisition accounting adjustments

 

 

 

13,559

 

 

Provision for income taxes

 

18,771

 

6,308

 

36,160

 

37,487

 

Adjusted EBITDA

 

$

145,952

 

$

100,527

 

$

380,770

 

$

290,176

 

 

Adjusted EBITDA Guidance Reconciliation

 

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

 

 

 

For the Year Ending December 31, 2013

 

 

 

Amount

 

Margin % (1)

 

 

 

(In millions)

 

 

 

Projected GAAP net income

 

$

97

 

to

 

$

110

 

2.8

%

to

  3.1%

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Pre-tax, non-cash acquisition accounting adjustments

 

14

 

to

 

14

 

0.4

%

to

  0.4%

 

Accretion of environmental liabilities

 

13

 

to

 

11

 

0.4

%

to

  0.3%

 

Depreciation and amortization

 

265

 

to

 

255

 

7.5

%

to

  7.2%

 

Interest expense, net

 

79

 

to

 

78

 

2.3

%

to

  2.2%

 

Provision for income taxes

 

55

 

to

 

60

 

1.6

%

to

  1.7%

 

Projected Adjusted EBITDA

 

$

523

 

to

 

$

528

 

15.0

%

to

14.9%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues (In millions)

 

$

3,500

 

to

 

$

3,550

 

 

 

 

 

 

 

GRAPHIC

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

 



 

Press Release

 

Clean Harbors Reports Third-Quarter 2013 Financial Results

 

 

 

 

For the Year Ending December 31, 2014

 

 

 

Amount

 

Margin % (1)

 

 

 

(In millions)

 

 

 

Projected GAAP net income

 

$

151

 

to

 

$

181

 

4.1

%

to

  4.8%

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Accretion of environmental liabilities

 

13

 

to

 

11

 

0.4

%

to

  0.3%

 

Depreciation and amortization

 

280

 

to

 

270

 

7.6

%

to

  7.1%

 

Interest expense, net

 

79

 

to

 

78

 

2.1

%

to

  2.0%

 

Provision for income taxes

 

87

 

to

 

100

 

2.3

%

to

  2.6%

 

Projected Adjusted EBITDA

 

$

610

 

to

 

$

640

 

16.5

%

to

16.8%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues (In millions)

 

$

3,700

 

to

 

$

3,800

 

 

 

 

 

 


(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.

 

About Clean Harbors

 

Clean Harbors (NYSE: CLH) is North America’s leading provider of environmental, energy and industrial services. The Company serves a diverse customer base, including a majority of the Fortune 500, across the chemical, energy, manufacturing and additional markets, 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

 

GRAPHIC

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

 



 

Press Release

 

Clean Harbors Reports Third-Quarter 2013 Financial Results

 

 

management, emergency spill response, industrial cleaning and maintenance, and recycling services. Through its Safety-Kleen subsidiary, Clean Harbors also is North America’s largest re-refiner and recycler of used oil and a leading provider of parts washers and environmental services to commercial, industrial and automotive customers. Founded in 1980 and based in Massachusetts, Clean Harbors operates throughout the United States, Canada, 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 future financial and operating results, the expected Safety-Kleen synergies 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 CFO

 

SVP Investor Relations and Corporate Communications

Clean Harbors, Inc.

 

Clean Harbors, Inc.

781.792.5100

 

781.792.5100

InvestorRelations@cleanharbors.com

 

Buckley.James@cleanharbors.com

 



 

Press Release

 

Clean Harbors Reports Third-Quarter 2013 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 Nine Months Ended:

 

 

 

September 30,

 

September 30,

 

September 30,

 

September 30,

 

 

 

2013

 

2012

 

2013

 

2012

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

907,535

 

$

533,806

 

$

2,630,226

 

$

1,628,946

 

Cost of revenues (exclusive of items shown separately below)

 

647,119

 

372,940

 

1,897,469

 

1,140,878

 

Selling, general and administrative expenses

 

114,464

 

60,339

 

365,546

 

197,892

 

Accretion of environmental liabilities

 

2,914

 

2,488

 

8,628

 

7,409

 

Depreciation and amortization

 

69,430

 

41,300

 

196,904

 

116,794

 

Income from operations

 

73,608

 

56,739

 

161,679

 

165,973

 

Other (expense) income

 

(150

)

(91

)

2,030

 

(465

)

Loss on early extinguishment of debt

 

 

(26,385

)

 

(26,385

)

Interest (expense), net

 

(19,326

)

(11,596

)

(58,784

)

(33,836

)

Income before provision for income taxes

 

54,132

 

18,667

 

104,925

 

105,287

 

Provision for income taxes

 

18,771

 

6,308

 

36,160

 

37,487

 

Net income

 

$

35,361

 

$

12,359

 

$

68,765

 

$

67,800

 

Earnings per share:

 

 

 

 

 

 

 

 

 

Basic

 

$

0.58

 

$

0.23

 

$

1.14

 

$

1.27

 

Diluted

 

$

0.58

 

$

0.23

 

$

1.13

 

$

1.27

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

60,610

 

53,374

 

60,542

 

53,303

 

Weighted average common shares outstanding plus potentially dilutive common shares

 

60,760

 

53,565

 

60,692

 

53,519

 

 

GRAPHIC

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

 



 

Press Release

 

Clean Harbors Reports Third-Quarter 2013 Financial Results

 

 

CLEAN HARBORS, INC. AND SUBSIDIARIES

 

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

 

ASSETS

 

(in thousands)

 

 

 

September 30,

 

December 31,

 

 

 

2013

 

2012

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

248,635

 

$

229,836

 

Marketable securities

 

11,787

 

11,778

 

Accounts receivable, net

 

603,054

 

541,423

 

Unbilled accounts receivable

 

42,122

 

27,072

 

Deferred costs

 

17,097

 

6,888

 

Prepaid expenses and other current assets

 

41,880

 

75,778

 

Inventories and supplies

 

155,301

 

171,441

 

Deferred tax assets

 

21,898

 

22,577

 

Total current assets

 

1,141,774

 

1,086,793

 

 

 

 

 

 

 

Property, plant and equipment, net

 

1,615,427

 

1,531,763

 

 

 

 

 

 

 

Other assets: Long-term investments

 

4,352

 

4,354

 

Deferred financing costs

 

21,565

 

21,657

 

Goodwill

 

590,152

 

593,771

 

Permits and other intangibles, net

 

567,776

 

572,817

 

Other

 

15,806

 

14,651

 

Total other assets

 

1,199,651

 

1,207,250

 

Total assets

 

$

3,956,852

 

$

3,825,806

 

 

GRAPHIC

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

 



 

Press Release

 

Clean Harbors Reports Third-Quarter 2013 Financial Results

 

 

CLEAN HARBORS, INC. AND SUBSIDIARIES

 

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

(in thousands)

 

 

 

September 30,

 

December 31,

 

 

 

2013

 

2012

 

Current liabilities:

 

 

 

 

 

Current portion of capital lease obligations

 

$

1,973

 

$

5,092

 

Accounts payable

 

321,097

 

256,468

 

Deferred revenue

 

61,912

 

50,942

 

Accrued expenses

 

256,813

 

232,429

 

Current portion of closure, post-closure and remedial liabilities

 

27,737

 

24,121

 

Total current liabilities

 

669,532

 

569,052

 

Other liabilities:

 

 

 

 

 

Closure and post-closure liabilities, less current portion

 

39,982

 

45,457

 

Remedial liabilities, less current portion

 

151,866

 

151,890

 

Long-term obligations

 

1,400,000

 

1,400,000

 

Capital lease obligations, less current portion

 

1,669

 

2,879

 

Deferred taxes, unrecognized tax benefits and other long-term liabilities

 

217,683

 

224,456

 

Total other liabilities

 

1,811,200

 

1,824,682

 

Total stockholders’ equity, net

 

1,476,120

 

1,432,072

 

Total liabilities and stockholders’ equity

 

$

3,956,852

 

$

3,825,806

 

 

GRAPHIC

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

 



 

Press Release

 

Clean Harbors Reports Third-Quarter 2013 Financial Results

 

 

Supplemental Segment Data (in thousands)

 

 

 

For the Three Months Ended:

 

Revenue

 

September 30, 2013

 

September 30, 2012

 

 

 

Third Party
Revenues

 

Intersegment
Revenues, net

 

Direct
Revenues

 

Third Party
Revenues

 

Intersegment
Revenues, net

 

Direct
Revenues

 

Technical Services

 

$

269,465

 

$

36,370

 

$

305,835

 

$

247,355

 

$

7,616

 

$

254,971

 

Oil Re-refining and Recycling

 

151,565

 

(64,918

)

86,647

 

 

 

 

SK Environmental Services

 

150,535

 

36,516

 

187,051

 

 

 

 

Industrial and Field Services

 

227,754

 

(7,249

)

220,505

 

203,371

 

(8,777

)

194,594

 

Oil and Gas Field Services

 

107,627

 

204

 

107,831

 

82,812

 

1,828

 

84,640

 

Corporate Items

 

589

 

(923

)

(334

)

268

 

(667

)

(399

)

Total

 

$

907,535

 

$

 

$

907,535

 

$

533,806

 

$

 

$

533,806

 

 

 

 

For the Nine Months Ended:

 

Revenue

 

September 30, 2013

 

September 30, 2012

 

 

 

Third Party
Revenues

 

Intersegment
Revenues, net

 

Direct
Revenues

 

Third Party
Revenues

 

Intersegment
Revenues, net

 

Direct
Revenues

 

Technical Services

 

$

759,666

 

$

88,769

 

$

848,435

 

$

712,313

 

$

26,040

 

$

738,353

 

Oil Re-refining and Recycling

 

438,191

 

(186,053

)

252,138

 

 

 

 

SK Environmental Services

 

453,325

 

126,525

 

579,850

 

 

 

 

Industrial and Field Services

 

693,667

 

(32,132

)

661,535

 

608,768

 

(31,198

)

577,570

 

Oil and Gas Field Services

 

294,183

 

6,000

 

300,183

 

306,566

 

6,620

 

313,186

 

Corporate Items (1)

 

(8,806

)

(3,109

)

(11,915

)

1,299

 

(1,462

)

(163

)

Total

 

$

2,630,226

 

$

 

$

2,630,226

 

$

1,628,946

 

$

 

$

1,628,946

 


(1)   Corporate Items revenue for the nine months ended September 30, 2013 includes one-time, non-cash reductions of approximately $10.2 million due to the impact of fair value acquisition accounting adjustments on Safety-Kleen’s historical deferred revenue at December 31, 2012. Revenue for the five reportable segments for the nine months ended September 30, 2013 excludes such adjustments to maintain comparability with future operating results and reflect how the Company manages the business.

 

GRAPHIC

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

 



 

Press Release

 

Clean Harbors Reports Third-Quarter 2013 Financial Results

 

 

Non-GAAP Segment 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 Nine Months Ended:

 

Adjusted EBITDA

 

September 30,
2013

 

September 30,
2012

 

September 30,
2013

 

September 30,
2012

 

 

 

 

 

 

 

 

 

 

 

Technical Services

 

$

78,849

 

$

68,241

 

$

208,284

 

$

188,673

 

Oil Re-refining and Recycling

 

18,892

 

 

46,861

 

 

SK Environmental Services

 

22,951

 

 

84,162

 

 

Industrial and Field Services

 

48,096

 

43,278

 

138,638

 

117,914

 

Oil and Gas Field Services

 

20,854

 

14,132

 

52,372

 

62,299

 

Corporate Items

 

(43,690

)

(25,124

)

(149,547

)

(78,710

)

Total

 

$

145,952

 

$

100,527

 

$

380,770

 

$

290,176

 

 

GRAPHIC

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