QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||||||||||||
FOR THE QUARTERLY PERIOD ENDED | ||||||||||||||
OR | ||||||||||||||
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or Other Jurisdiction of Incorporation or Organization) | (IRS Employer Identification No.) | |||||||||||||||||||||||||
(Address of Principal Executive Offices) | (Zip Code) |
Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||||||||
☒ | Accelerated filer | ☐ | |||||||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | |||||||||||||||
Emerging growth company |
Page No. | |||||
September 30, 2023 | December 31, 2022 | ||||||||||
ASSETS | (unaudited) | ||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Short-term marketable securities | |||||||||||
Accounts receivable, net of allowances aggregating $ | |||||||||||
Unbilled accounts receivable | |||||||||||
Inventories and supplies | |||||||||||
Prepaid expenses and other current assets | |||||||||||
Total current assets | |||||||||||
Property, plant and equipment, net | |||||||||||
Other assets: | |||||||||||
Operating lease right-of-use assets | |||||||||||
Goodwill | |||||||||||
Permits and other intangibles, net | |||||||||||
Other | |||||||||||
Total other assets | |||||||||||
Total assets | $ | $ | |||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||
Current liabilities: | |||||||||||
Current portion of long-term debt | $ | $ | |||||||||
Accounts payable | |||||||||||
Deferred revenue | |||||||||||
Accrued expenses and other current liabilities | |||||||||||
Current portion of closure, post-closure and remedial liabilities | |||||||||||
Current portion of operating lease liabilities | |||||||||||
Total current liabilities | |||||||||||
Other liabilities: | |||||||||||
Closure and post-closure liabilities, less current portion of $ | |||||||||||
Remedial liabilities, less current portion of $ | |||||||||||
Long-term debt, less current portion | |||||||||||
Operating lease liabilities, less current portion | |||||||||||
Deferred tax liabilities | |||||||||||
Other long-term liabilities | |||||||||||
Total other liabilities | |||||||||||
Commitments and contingent liabilities (See Note 16) | |||||||||||
Stockholders’ equity: | |||||||||||
Common stock, $ | |||||||||||
Authorized | |||||||||||
Additional paid-in capital | |||||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Accumulated earnings | |||||||||||
Total stockholders’ equity | |||||||||||
Total liabilities and stockholders’ equity | $ | $ |
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||
Service revenues | $ | $ | $ | $ | ||||||||||||||||||||||
Product revenues | ||||||||||||||||||||||||||
Total revenues | ||||||||||||||||||||||||||
Cost of revenues: (exclusive of items shown separately below) | ||||||||||||||||||||||||||
Service revenues | ||||||||||||||||||||||||||
Product revenues | ||||||||||||||||||||||||||
Total cost of revenues | ||||||||||||||||||||||||||
Selling, general and administrative expenses | ||||||||||||||||||||||||||
Accretion of environmental liabilities | ||||||||||||||||||||||||||
Depreciation and amortization | ||||||||||||||||||||||||||
Income from operations | ||||||||||||||||||||||||||
Other income (expense), net | ( | |||||||||||||||||||||||||
Loss on early extinguishment of debt | ( | |||||||||||||||||||||||||
Gain on sale of business | ||||||||||||||||||||||||||
Interest expense, net of interest income of $ | ( | ( | ( | ( | ||||||||||||||||||||||
Income before provision for income taxes | ||||||||||||||||||||||||||
Provision for income taxes | ||||||||||||||||||||||||||
Net income | $ | $ | $ | $ | ||||||||||||||||||||||
Earnings per share: | ||||||||||||||||||||||||||
Basic | $ | $ | $ | $ | ||||||||||||||||||||||
Diluted | $ | $ | $ | $ | ||||||||||||||||||||||
Shares used to compute earnings per share - Basic | ||||||||||||||||||||||||||
Shares used to compute earnings per share - Diluted |
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
Net income | $ | $ | $ | $ | ||||||||||||||||||||||
Other comprehensive (loss) income, net of tax: | ||||||||||||||||||||||||||
Unrealized gain (loss) on available-for-sale securities | ( | ( | ||||||||||||||||||||||||
Unrealized gain on fair value of interest rate hedges | ||||||||||||||||||||||||||
Reclassification adjustment for interest rate hedge amounts realized in net income | ( | ( | ( | |||||||||||||||||||||||
Reclassification adjustment for settlement of interest rate hedges | ( | |||||||||||||||||||||||||
Unfunded pension liability | ( | |||||||||||||||||||||||||
Foreign currency translation adjustments | ( | ( | ( | |||||||||||||||||||||||
Other comprehensive (loss) income, net of tax | ( | ( | ( | |||||||||||||||||||||||
Comprehensive income | $ | $ | $ | $ |
Nine Months Ended | |||||||||||
September 30, | |||||||||||
2023 | 2022 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | $ | |||||||||
Adjustments to reconcile net income to net cash from operating activities: | |||||||||||
Depreciation and amortization | |||||||||||
Allowance for doubtful accounts | |||||||||||
Amortization of deferred financing costs and debt discount | |||||||||||
Accretion of environmental liabilities | |||||||||||
Changes in environmental liability estimates | |||||||||||
Deferred income taxes | ( | ||||||||||
Other expense (income), net | ( | ||||||||||
Stock-based compensation | |||||||||||
Loss on early extinguishment of debt | |||||||||||
Gain on sale of business | ( | ||||||||||
Environmental expenditures | ( | ( | |||||||||
Changes in assets and liabilities, net of acquisitions: | |||||||||||
Accounts receivable and unbilled accounts receivable | ( | ( | |||||||||
Inventories and supplies | ( | ||||||||||
Other current and non-current assets | ( | ( | |||||||||
Accounts payable | ( | ||||||||||
Other current and long-term liabilities | ( | ||||||||||
Net cash from operating activities | |||||||||||
Cash flows used in investing activities: | |||||||||||
Additions to property, plant and equipment | ( | ( | |||||||||
Proceeds from sale and disposal of fixed assets | |||||||||||
Acquisitions, net of cash acquired | ( | ( | |||||||||
Proceeds from sale of business, net of transaction costs | |||||||||||
Additions to intangible assets including costs to obtain or renew permits | ( | ( | |||||||||
Purchases of available-for-sale securities | ( | ( | |||||||||
Proceeds from sale of available-for-sale securities | |||||||||||
Net cash used in investing activities | ( | ( | |||||||||
Cash flows used in financing activities: | |||||||||||
Change in uncashed checks | |||||||||||
Tax payments related to withholdings on vested restricted stock | ( | ( | |||||||||
Repurchases of common stock | ( | ( | |||||||||
Deferred financing costs paid | ( | ( | |||||||||
Payments on finance leases | ( | ( | |||||||||
Principal payments on debt | ( | ( | |||||||||
Proceeds from issuance of debt | |||||||||||
Borrowing from revolving credit facility | |||||||||||
Payment on revolving credit facility | ( | ||||||||||
Net cash used in financing activities | ( | ( | |||||||||
Effect of exchange rate change on cash | ( | ||||||||||
Decrease in cash and cash equivalents | ( | ( | |||||||||
Cash and cash equivalents, beginning of period | |||||||||||
Cash and cash equivalents, end of period | $ | $ | |||||||||
Supplemental information: | |||||||||||
Cash payments for interest and income taxes: | |||||||||||
Interest paid | $ | $ | |||||||||
Income taxes paid, net of refunds | |||||||||||
Non-cash investing activities: | |||||||||||
Property, plant and equipment accrued | |||||||||||
Remedial liability assumed in acquisition of property, plant and equipment | |||||||||||
ROU assets obtained in exchange for operating lease liabilities | |||||||||||
ROU assets obtained in exchange for finance lease liabilities | |||||||||||
Common Stock | Accumulated Other Comprehensive Loss | ||||||||||||||||||||||||||||||||||
Number of Shares | $ Par Value | Additional Paid-in Capital | Accumulated Earnings | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||
Balance at January 1, 2023 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
Issuance of common stock for restricted share vesting, net of employee tax withholdings | — | ( | — | — | ( | ||||||||||||||||||||||||||||||
Repurchases of common stock | ( | — | ( | — | — | ( | |||||||||||||||||||||||||||||
Balance at March 31, 2023 | ( | ||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | |||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
Issuance of common stock for restricted share vesting, net of employee tax withholdings | — | ( | — | — | ( | ||||||||||||||||||||||||||||||
Repurchases of common stock | ( | — | ( | — | — | ( | |||||||||||||||||||||||||||||
Balance at June 30, 2023 | ( | ||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
Issuance of common stock for restricted share vesting, net of employee tax withholdings | ( | — | — | ( | |||||||||||||||||||||||||||||||
Repurchases of common stock | ( | ( | ( | — | — | ( | |||||||||||||||||||||||||||||
Balance at September 30, 2023 | $ | $ | $ | ( | $ | $ |
Common Stock | Accumulated Other Comprehensive Loss | ||||||||||||||||||||||||||||||||||
Number of Shares | $ Par Value | Additional Paid-in Capital | Accumulated Earnings | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||
Balance at January 1, 2022 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | |||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
Issuance of common stock for restricted share vesting, net of employee tax withholdings | — | ( | — | — | ( | ||||||||||||||||||||||||||||||
Repurchases of common stock | ( | — | ( | — | — | ( | |||||||||||||||||||||||||||||
Balance at March 31, 2022 | ( | ||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
Issuance of common stock for restricted share vesting, net of employee tax withholdings | — | ( | — | — | ( | ||||||||||||||||||||||||||||||
Repurchases of common stock | ( | ( | ( | — | — | ( | |||||||||||||||||||||||||||||
Balance at June 30, 2022 | ( | ||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
Issuance of common stock for restricted share vesting, net of employee tax withholdings | ( | — | — | ( | |||||||||||||||||||||||||||||||
Repurchases of common stock | ( | ( | ( | — | — | ( | |||||||||||||||||||||||||||||
Balance at September 30, 2022 | $ | $ | $ | ( | $ | $ |
For the Three Months Ended September 30, 2023 | ||||||||||||||||||||||||||
Environmental Services | Safety-Kleen Sustainability Solutions | Corporate | Total | |||||||||||||||||||||||
Primary Geographical Markets | ||||||||||||||||||||||||||
United States | $ | $ | $ | $ | ||||||||||||||||||||||
Canada | ||||||||||||||||||||||||||
Total third-party revenues | $ | $ | $ | $ | ||||||||||||||||||||||
Sources of Revenue | ||||||||||||||||||||||||||
Technical Services | $ | $ | $ | $ | ||||||||||||||||||||||
Industrial Services and Other | ||||||||||||||||||||||||||
Field and Emergency Response Services | ||||||||||||||||||||||||||
Safety-Kleen Environmental Services | ||||||||||||||||||||||||||
Safety-Kleen Oil | ||||||||||||||||||||||||||
Total third-party revenues | $ | $ | $ | $ |
For the Three Months Ended September 30, 2022 | ||||||||||||||||||||||||||
Environmental Services | Safety-Kleen Sustainability Solutions | Corporate | Total | |||||||||||||||||||||||
Primary Geographical Markets | ||||||||||||||||||||||||||
United States | $ | $ | $ | $ | ||||||||||||||||||||||
Canada | ||||||||||||||||||||||||||
Total third-party revenues | $ | $ | $ | $ | ||||||||||||||||||||||
Sources of Revenue | ||||||||||||||||||||||||||
Technical Services | $ | $ | $ | $ | ||||||||||||||||||||||
Industrial Services and Other | ||||||||||||||||||||||||||
Field and Emergency Response Services | ||||||||||||||||||||||||||
Safety-Kleen Environmental Services | ||||||||||||||||||||||||||
Safety-Kleen Oil | ||||||||||||||||||||||||||
Total third-party revenues | $ | $ | $ | $ |
For the Nine Months Ended September 30, 2023 | ||||||||||||||||||||||||||
Environmental Services | Safety-Kleen Sustainability Solutions | Corporate | Total | |||||||||||||||||||||||
Primary Geographical Markets | ||||||||||||||||||||||||||
United States | $ | $ | $ | $ | ||||||||||||||||||||||
Canada | ||||||||||||||||||||||||||
Total third-party revenues | $ | $ | $ | $ | ||||||||||||||||||||||
Sources of Revenue | ||||||||||||||||||||||||||
Technical Services | $ | $ | $ | $ | ||||||||||||||||||||||
Industrial Services and Other | ||||||||||||||||||||||||||
Field and Emergency Response Services | ||||||||||||||||||||||||||
Safety-Kleen Environmental Services | ||||||||||||||||||||||||||
Safety-Kleen Oil | ||||||||||||||||||||||||||
Total third-party revenues | $ | $ | $ | $ |
For the Nine Months Ended September 30, 2022 | ||||||||||||||||||||||||||
Environmental Services | Safety-Kleen Sustainability Solutions | Corporate | Total | |||||||||||||||||||||||
Primary Geographical Markets | ||||||||||||||||||||||||||
United States | $ | $ | $ | $ | ||||||||||||||||||||||
Canada | ||||||||||||||||||||||||||
Total third-party revenues | $ | $ | $ | $ | ||||||||||||||||||||||
Sources of Revenue | ||||||||||||||||||||||||||
Technical Services | $ | $ | $ | $ | ||||||||||||||||||||||
Industrial Services and Other | ||||||||||||||||||||||||||
Field and Emergency Response Services | ||||||||||||||||||||||||||
Safety-Kleen Environmental Services | ||||||||||||||||||||||||||
Safety-Kleen Oil | ||||||||||||||||||||||||||
Total third-party revenues | $ | $ | $ | $ |
(in thousands) | September 30, 2023 | December 31, 2022 | ||||||||||||
Receivables | $ | $ | ||||||||||||
Contract assets (unbilled receivables) | ||||||||||||||
Contract liabilities (deferred revenue) |
At Acquisition Date As Reported March 31, 2023 | Measurement Period Adjustments | At Acquisition Date As Reported September 30, 2023 | |||||||||||||||
Accounts receivable | $ | $ | ( | $ | |||||||||||||
Inventories and supplies | — | ||||||||||||||||
Prepaid expenses and other current assets | |||||||||||||||||
Property, plant and equipment | ( | ||||||||||||||||
Permits and other intangibles | |||||||||||||||||
Operating lease right-of-use assets | — | ||||||||||||||||
Other non-current assets | |||||||||||||||||
Current liabilities | ( | ( | |||||||||||||||
Current portion of operating lease liabilities | ( | — | ( | ||||||||||||||
Operating lease liabilities, less current portion | ( | — | ( | ||||||||||||||
Other long-term liabilities | ( | ( | |||||||||||||||
Total identifiable net assets | ( | ||||||||||||||||
Goodwill | ( | ||||||||||||||||
Total purchase price | $ | $ | ( | $ |
At Acquisition Date As Reported December 31, 2022 | Measurement Period Adjustments | Final Allocation At Acquisition Date As Reported September 30, 2023 | |||||||||||||||
Accounts receivable | $ | $ | ( | $ | |||||||||||||
Inventories and supplies | ( | ||||||||||||||||
Prepaid expenses and other current assets | — | ||||||||||||||||
Property, plant and equipment | |||||||||||||||||
Permits and other intangibles | — | ||||||||||||||||
Operating lease right-of-use assets | — | ||||||||||||||||
Other non-current assets | — | ||||||||||||||||
Current liabilities | ( | ( | ( | ||||||||||||||
Current portion of operating lease liabilities | ( | — | ( | ||||||||||||||
Operating lease liabilities, less current portion | ( | — | ( | ||||||||||||||
Other long-term liabilities | ( | ( | ( | ||||||||||||||
Total identifiable net assets | ( | ||||||||||||||||
Goodwill | |||||||||||||||||
Total purchase price | $ | $ | $ |
September 30, 2023 | December 31, 2022 | ||||||||||
Oil and oil related products | $ | $ | |||||||||
Supplies | |||||||||||
Solvent and solutions | |||||||||||
Other | |||||||||||
Total inventories and supplies | $ | $ |
September 30, 2023 | December 31, 2022 | ||||||||||
Land | $ | $ | |||||||||
Asset retirement costs (non-landfill) | |||||||||||
Landfill assets | |||||||||||
Buildings and improvements (1) | |||||||||||
Vehicles (2) | |||||||||||
Equipment (3) | |||||||||||
Construction in progress | |||||||||||
Less - accumulated depreciation and amortization | |||||||||||
Total property, plant and equipment, net | $ | $ |
Environmental Services | Safety-Kleen Sustainability Solutions | Totals | |||||||||||||||
Balance at January 1, 2023 | $ | $ | $ | ||||||||||||||
Increase from current period acquisition | |||||||||||||||||
Measurement period adjustments from prior period acquisitions | |||||||||||||||||
Foreign currency translation | |||||||||||||||||
Balance at September 30, 2023 | $ | $ | $ |
September 30, 2023 | December 31, 2022 | ||||||||||||||||||||||||||||||||||
Cost | Accumulated Amortization | Net | Cost | Accumulated Amortization | Net | ||||||||||||||||||||||||||||||
Permits | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Customer and supplier relationships | |||||||||||||||||||||||||||||||||||
Other intangible assets | |||||||||||||||||||||||||||||||||||
Total amortizable permits and other intangible assets | |||||||||||||||||||||||||||||||||||
Trademarks and trade names | — | — | |||||||||||||||||||||||||||||||||
Total permits and other intangible assets | $ | $ | $ | $ | $ | $ |
Years Ending December 31, | Expected Amortization | ||||
2023 (three months) | $ | ||||
2024 | |||||
2025 | |||||
2026 | |||||
2027 | |||||
Thereafter | |||||
$ |
September 30, 2023 | December 31, 2022 | ||||||||||
Accrued insurance | $ | $ | |||||||||
Accrued interest | |||||||||||
Accrued compensation and benefits | |||||||||||
Accrued income, real estate, sales and other taxes | |||||||||||
Accrued other | |||||||||||
$ | $ |
Landfill Retirement Liability | Non-Landfill Retirement Liability | Total | |||||||||||||||
Balance at January 1, 2023 | $ | $ | $ | ||||||||||||||
Liabilities assumed in acquisitions | |||||||||||||||||
Measurement period adjustments from prior period acquisitions | |||||||||||||||||
New asset retirement obligations | |||||||||||||||||
Accretion | |||||||||||||||||
Changes in estimates recorded to consolidated statement of operations | |||||||||||||||||
Changes in estimates recorded to consolidated balance sheet | ( | ||||||||||||||||
Expenditures | ( | ( | ( | ||||||||||||||
Currency translation and other | |||||||||||||||||
Balance at September 30, 2023 | $ | $ | $ |
Remedial Liabilities for Landfill Sites | Remedial Liabilities for Inactive Sites | Remedial Liabilities (Including Superfund) for Non-Landfill Operations | Total | ||||||||||||||||||||
Balance at January 1, 2023 | $ | $ | $ | $ | |||||||||||||||||||
Accretion | |||||||||||||||||||||||
Changes in estimates recorded to consolidated statement of operations | |||||||||||||||||||||||
Expenditures | ( | ( | ( | ( | |||||||||||||||||||
Currency translation and other | |||||||||||||||||||||||
Balance at September 30, 2023 | $ | $ | $ | $ |
Current Portion of Long-Term Debt: | September 30, 2023 | December 31, 2022 | |||||||||
Secured senior term loans | $ | $ | |||||||||
Long-Term Debt: | |||||||||||
Secured senior term loans due June 30, 2024 ("2024 Term Loans") | $ | $ | |||||||||
Secured senior term loans due October 8, 2028 ("2028 Term Loans") | |||||||||||
Unsecured senior notes, at | |||||||||||
Unsecured senior notes, at | |||||||||||
Unsecured senior notes, at | |||||||||||
Long-term debt, at par | $ | $ | |||||||||
Unamortized debt issuance costs and discount, net | ( | ( | |||||||||
Long-term debt, at carrying value | $ | $ |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Numerator for basic and diluted earnings per share: | |||||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Denominator: | |||||||||||||||||||||||
Weighted-average basic shares outstanding | |||||||||||||||||||||||
Dilutive effect of outstanding stock awards | |||||||||||||||||||||||
Dilutive shares outstanding | |||||||||||||||||||||||
Basic earnings per share: | $ | $ | $ | $ | |||||||||||||||||||
Diluted earnings per share: | $ | $ | $ | $ |
Foreign Currency Translation Adjustments | Unrealized Loss on Available-For-Sale Securities | Unrealized Gain on Fair Value of Interest Rate Hedges | Unrealized Loss on Unfunded Pension Liability | Total | |||||||||||||||||||||||||
Balance at January 1, 2023 | $ | ( | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||||||
Other comprehensive income (loss) before reclassifications | ( | ||||||||||||||||||||||||||||
Amounts reclassified out of accumulated other comprehensive loss | ( | ( | |||||||||||||||||||||||||||
Tax (provision) benefit | ( | ||||||||||||||||||||||||||||
Other comprehensive income (loss) | ( | ( | ( | ||||||||||||||||||||||||||
Balance at September 30, 2023 | $ | ( | $ | ( | $ | $ | ( | $ | ( |
Component of Accumulated Other Comprehensive Loss | For the Three Months Ended September 30, 2023 | For the Nine Months Ended September 30, 2023 | Location | |||||||||||||||||
Unrealized Gain on Fair Value of Interest Rate Hedges (1) | $ | $ | Interest expense, net of interest income | |||||||||||||||||
Restricted Stock | Number of Shares | Weighted Average Grant-Date Fair Value | |||||||||
Balance at January 1, 2023 | $ | ||||||||||
Granted | |||||||||||
Vested | ( | ||||||||||
Forfeited | ( | ||||||||||
Balance at September 30, 2023 | $ |
Performance Stock | Number of Shares | Weighted Average Grant-Date Fair Value | |||||||||
Balance at January 1, 2023 | $ | ||||||||||
Granted | |||||||||||
Vested | ( | ||||||||||
Forfeited | ( | ||||||||||
Balance at September 30, 2023 | $ |
For the Three Months Ended | For the Three Months Ended | ||||||||||||||||||||||||||||||||||
September 30, 2023 | September 30, 2022 | ||||||||||||||||||||||||||||||||||
Third-Party Revenues | Intersegment Revenues (Expenses), net | Direct Revenues | Third-Party Revenues | Intersegment Revenues (Expenses), net | Direct Revenues | ||||||||||||||||||||||||||||||
Environmental Services | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Safety-Kleen Sustainability Solutions | ( | ( | |||||||||||||||||||||||||||||||||
Corporate Items | — | — | |||||||||||||||||||||||||||||||||
Total | $ | $ | — | $ | $ | $ | — | $ |
For the Nine Months Ended | For the Nine Months Ended | ||||||||||||||||||||||||||||||||||
September 30, 2023 | September 30, 2022 | ||||||||||||||||||||||||||||||||||
Third-Party Revenues | Intersegment Revenues (Expenses), net | Direct Revenues | Third-Party Revenues | Intersegment Revenues (Expenses), net | Direct Revenues | ||||||||||||||||||||||||||||||
Environmental Services | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Safety-Kleen Sustainability Solutions | ( | ( | |||||||||||||||||||||||||||||||||
Corporate Items | — | — | |||||||||||||||||||||||||||||||||
Total | $ | $ | — | $ | $ | $ | — | $ |
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Adjusted EBITDA: | |||||||||||||||||||||||
Environmental Services | $ | $ | $ | $ | |||||||||||||||||||
Safety-Kleen Sustainability Solutions | |||||||||||||||||||||||
Corporate Items | ( | ( | ( | ( | |||||||||||||||||||
Total | |||||||||||||||||||||||
Reconciliation to Consolidated Statements of Operations: | |||||||||||||||||||||||
Accretion of environmental liabilities | |||||||||||||||||||||||
Stock-based compensation | |||||||||||||||||||||||
Depreciation and amortization | |||||||||||||||||||||||
Income from operations | |||||||||||||||||||||||
Other (income) expense, net | ( | ( | ( | ||||||||||||||||||||
Loss on early extinguishment of debt | |||||||||||||||||||||||
Gain on sale of business | ( | ||||||||||||||||||||||
Interest expense, net of interest income | |||||||||||||||||||||||
Income before provision for income taxes | $ | $ | $ | $ |
Summary of Operations | |||||||||||||||||||||||||||||||||||||||||||||||
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||
September 30, 2023 | September 30, 2022 | Change | % Change | September 30, 2023 | September 30, 2022 | Change | % Change | ||||||||||||||||||||||||||||||||||||||||
Direct Revenues (1): | |||||||||||||||||||||||||||||||||||||||||||||||
Environmental Services | $ | 1,146,363 | $ | 1,086,484 | $ | 59,879 | 5.5% | $ | 3,389,140 | $ | 3,124,672 | $ | 264,468 | 8.5% | |||||||||||||||||||||||||||||||||
Safety-Kleen Sustainability Solutions | 219,221 | 276,319 | (57,098) | (20.7) | 681,508 | 763,401 | (81,893) | (10.7) | |||||||||||||||||||||||||||||||||||||||
Corporate Items | 112 | 283 | (171) | N/M | 335 | 434 | (99) | N/M | |||||||||||||||||||||||||||||||||||||||
Total | 1,365,696 | 1,363,086 | 2,610 | 0.2 | 4,070,983 | 3,888,507 | 182,476 | 4.7 | |||||||||||||||||||||||||||||||||||||||
Cost of Revenues (2): | |||||||||||||||||||||||||||||||||||||||||||||||
Environmental Services | 766,242 | 746,869 | 19,373 | 2.6 | 2,300,853 | 2,175,864 | 124,989 | 5.7 | |||||||||||||||||||||||||||||||||||||||
Safety-Kleen Sustainability Solutions | 169,207 | 154,753 | 14,454 | 9.3 | 498,965 | 457,790 | 41,175 | 9.0 | |||||||||||||||||||||||||||||||||||||||
Corporate Items | 8,502 | 9,026 | (524) | N/M | 23,159 | 18,852 | 4,307 | N/M | |||||||||||||||||||||||||||||||||||||||
Total | 943,951 | 910,648 | 33,303 | 3.7 | 2,822,977 | 2,652,506 | 170,471 | 6.4 | |||||||||||||||||||||||||||||||||||||||
Selling, General & Administrative Expenses: | |||||||||||||||||||||||||||||||||||||||||||||||
Environmental Services | 91,139 | 78,928 | 12,211 | 15.5 | 265,338 | 235,178 | 30,160 | 12.8 | |||||||||||||||||||||||||||||||||||||||
Safety-Kleen Sustainability Solutions | 18,868 | 18,410 | 458 | 2.5 | 56,519 | 53,568 | 2,951 | 5.5 | |||||||||||||||||||||||||||||||||||||||
Corporate Items | 61,012 | 54,373 | 6,639 | 12.2 | 183,297 | 169,746 | 13,551 | 8.0 | |||||||||||||||||||||||||||||||||||||||
Total | 171,019 | 151,711 | 19,308 | 12.7 | 505,154 | 458,492 | 46,662 | 10.2 | |||||||||||||||||||||||||||||||||||||||
Adjusted EBITDA: | |||||||||||||||||||||||||||||||||||||||||||||||
Environmental Services | 288,982 | 260,687 | 28,295 | 10.9 | 822,949 | 713,630 | 109,319 | 15.3 | |||||||||||||||||||||||||||||||||||||||
Safety-Kleen Sustainability Solutions | 31,146 | 103,156 | (72,010) | (69.8) | 126,024 | 252,043 | (126,019) | (50.0) | |||||||||||||||||||||||||||||||||||||||
Corporate Items | (65,111) | (55,288) | (9,823) | (17.8) | (191,312) | (167,789) | (23,523) | (14.0) | |||||||||||||||||||||||||||||||||||||||
Total | $ | 255,017 | $ | 308,555 | $ | (53,538) | (17.4)% | $ | 757,661 | $ | 797,884 | $ | (40,223) | (5.0)% | |||||||||||||||||||||||||||||||||
Adjusted EBITDA as a % of Direct Revenues: | |||||||||||||||||||||||||||||||||||||||||||||||
Environmental Services (3) | 25.2 | % | 24.0 | % | 1.2% | 24.3 | % | 22.8 | % | 1.5 | % | ||||||||||||||||||||||||||||||||||||
Safety-Kleen Sustainability Solutions(3) | 14.2 | % | 37.3 | % | (23.1)% | 18.5 | % | 33.0 | % | (14.5) | % | ||||||||||||||||||||||||||||||||||||
Corporate Items (4) | (4.8) | % | (4.1) | % | (0.7)% | (4.7) | % | (4.3) | % | (0.4) | % | ||||||||||||||||||||||||||||||||||||
Total | 18.7 | % | 22.6 | % | (3.9)% | 18.6 | % | 20.5 | % | (1.9) | % |
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||
September 30, | 2023 over 2022 | September 30, | 2023 over 2022 | |||||||||||||||||||||||||||||||||||||||||||||||
(in thousands, except percentages) | 2023 | 2022 | Change | % Change | 2023 | 2022 | Change | % Change | ||||||||||||||||||||||||||||||||||||||||||
Direct revenues | $ | 1,146,363 | $ | 1,086,484 | $ | 59,879 | 5.5 | % | $ | 3,389,140 | $ | 3,124,672 | $ | 264,468 | 8.5 | % |
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||
September 30, | 2023 over 2022 | September 30, | 2023 over 2022 | |||||||||||||||||||||||||||||||||||||||||||||||
(in thousands, except percentages) | 2023 | 2022 | Change | % Change | 2023 | 2022 | Change | % Change | ||||||||||||||||||||||||||||||||||||||||||
Direct revenues | $ | 219,221 | $ | 276,319 | $ | (57,098) | (20.7) | % | $ | 681,508 | $ | 763,401 | $ | (81,893) | (10.7) | % |
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||
September 30, | 2023 over 2022 | September 30, | 2023 over 2022 | |||||||||||||||||||||||||||||||||||||||||||||||
(in thousands, except percentages) | 2023 | 2022 | Change | % Change | 2023 | 2022 | Change | % Change | ||||||||||||||||||||||||||||||||||||||||||
Cost of revenues | $ | 766,242 | $ | 746,869 | $ | 19,373 | 2.6 | % | $ | 2,300,853 | $ | 2,175,864 | $ | 124,989 | 5.7 | % | ||||||||||||||||||||||||||||||||||
As a % of Direct revenues | 66.8 | % | 68.7 | % | (1.9) | % | 67.9 | % | 69.6 | % | (1.7) | % |
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||
September 30, | 2023 over 2022 | September 30, | 2023 over 2022 | |||||||||||||||||||||||||||||||||||||||||||||||
(in thousands, except percentages) | 2023 | 2022 | Change | % Change | 2023 | 2022 | Change | % Change | ||||||||||||||||||||||||||||||||||||||||||
Cost of revenues | $ | 169,207 | $ | 154,753 | $ | 14,454 | 9.3 | % | $ | 498,965 | $ | 457,790 | $ | 41,175 | 9.0 | % | ||||||||||||||||||||||||||||||||||
As a % of Direct revenues | 77.2 | % | 56.0 | % | 21.2 | % | 73.2 | % | 60.0 | % | 13.2 | % |
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||
September 30, | 2023 over 2022 | September 30, | 2023 over 2022 | |||||||||||||||||||||||||||||||||||||||||||||||
(in thousands, except percentages) | 2023 | 2022 | Change | % Change | 2023 | 2022 | Change | % Change | ||||||||||||||||||||||||||||||||||||||||||
SG&A expenses | $ | 91,139 | $ | 78,928 | $ | 12,211 | 15.5 | % | $ | 265,338 | $ | 235,178 | $ | 30,160 | 12.8 | % | ||||||||||||||||||||||||||||||||||
As a % of Direct revenues | 8.0 | % | 7.3 | % | 0.7 | % | 7.8 | % | 7.5 | % | 0.3 | % |
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||
September 30, | 2023 over 2022 | September 30, | 2023 over 2022 | |||||||||||||||||||||||||||||||||||||||||||||||
(in thousands, except percentages) | 2023 | 2022 | Change | % Change | 2023 | 2022 | Change | % Change | ||||||||||||||||||||||||||||||||||||||||||
SG&A expenses | $ | 18,868 | $ | 18,410 | $ | 458 | 2.5 | % | $ | 56,519 | $ | 53,568 | $ | 2,951 | 5.5 | % | ||||||||||||||||||||||||||||||||||
As a % of Direct revenues | 8.6 | % | 6.7 | % | 1.9 | % | 8.3 | % | 7.0 | % | 1.3 | % |
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||
September 30, | 2023 over 2022 | September 30, | 2023 over 2022 | |||||||||||||||||||||||||||||||||||||||||||||||
(in thousands, except percentages) | 2023 | 2022 | Change | % Change | 2023 | 2022 | Change | % Change | ||||||||||||||||||||||||||||||||||||||||||
SG&A expenses | $ | 61,012 | $ | 54,373 | $ | 6,639 | 12.2 | % | $ | 183,297 | $ | 169,746 | $ | 13,551 | 8.0 | % | ||||||||||||||||||||||||||||||||||
As a % of Total Company Direct revenues | 4.5 | % | 4.0 | % | 0.5 | % | 4.5 | % | 4.4 | % | 0.1 | % |
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||
September 30, | 2023 over 2022 | September 30, | 2023 over 2022 | |||||||||||||||||||||||||||||||||||||||||||||||
(in thousands, except percentages) | 2023 | 2022 | Change | % Change | 2023 | 2022 | Change | % Change | ||||||||||||||||||||||||||||||||||||||||||
Adjusted EBITDA: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Environmental Services | $ | 288,982 | $ | 260,687 | $ | 28,295 | 10.9 | % | $ | 822,949 | $ | 713,630 | $ | 109,319 | 15.3 | % | ||||||||||||||||||||||||||||||||||
Safety-Kleen Sustainability Solutions | 31,146 | 103,156 | (72,010) | (69.8) | 126,024 | 252,043 | (126,019) | (50.0) | ||||||||||||||||||||||||||||||||||||||||||
Corporate Items | (65,111) | (55,288) | (9,823) | (17.8) | (191,312) | (167,789) | (23,523) | (14.0) | ||||||||||||||||||||||||||||||||||||||||||
Total | $ | 255,017 | $ | 308,555 | $ | (53,538) | (17.4) | % | $ | 757,661 | $ | 797,884 | $ | (40,223) | (5.0) | % | ||||||||||||||||||||||||||||||||||
Adjusted EBITDA as a % of Direct Revenues (1): | ||||||||||||||||||||||||||||||||||||||||||||||||||
Environmental Services | 25.2 | % | 24.0 | % | 1.2 | % | 24.3 | % | 22.8 | % | 1.5 | % | ||||||||||||||||||||||||||||||||||||||
Safety-Kleen Sustainability Solutions | 14.2 | % | 37.3 | % | (23.1) | % | 18.5 | % | 33.0 | % | (14.5) | % | ||||||||||||||||||||||||||||||||||||||
Corporate Items | (4.8) | % | (4.1) | % | (0.7) | % | (4.7) | % | (4.3) | % | (0.4) | % | ||||||||||||||||||||||||||||||||||||||
Total | 18.7 | % | 22.6 | % | (3.9) | % | 18.6 | % | 20.5 | % | (1.9) | % |
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Net income | $ | 91,340 | $ | 135,799 | $ | 279,507 | $ | 329,270 | |||||||||||||||
Accretion of environmental liabilities | 3,388 | 3,246 | 10,281 | 9,599 | |||||||||||||||||||
Stock-based compensation | 4,291 | 7,828 | 14,809 | 20,375 | |||||||||||||||||||
Depreciation and amortization | 92,970 | 88,394 | 267,425 | 260,560 | |||||||||||||||||||
Other (income) expense, net | (334) | (104) | 833 | (2,073) | |||||||||||||||||||
Loss on early extinguishment of debt | — | — | 2,362 | — | |||||||||||||||||||
Gain on sale of business | — | — | — | (8,864) | |||||||||||||||||||
Interest expense, net of interest income | 29,696 | 28,081 | 80,400 | 79,354 | |||||||||||||||||||
Provision for income taxes | 33,666 | 45,311 | 102,044 | 109,663 | |||||||||||||||||||
Adjusted EBITDA | $ | 255,017 | $ | 308,555 | $ | 757,661 | $ | 797,884 | |||||||||||||||
As a % of Direct revenues | 18.7 | % | 22.6 | % | 18.6 | % | 20.5 | % |
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||
September 30, | 2023 over 2022 | September 30, | 2023 over 2022 | |||||||||||||||||||||||||||||||||||||||||||||||
(in thousands, except percentages) | 2023 | 2022 | Change | % Change | 2023 | 2022 | Change | % Change | ||||||||||||||||||||||||||||||||||||||||||
Depreciation of fixed assets and amortization of landfills and finance leases | $ | 80,432 | $ | 75,327 | $ | 5,105 | 6.8 | % | $ | 229,658 | $ | 223,001 | $ | 6,657 | 3.0 | % | ||||||||||||||||||||||||||||||||||
Permits and other intangibles amortization | 12,538 | 13,067 | (529) | (4.0) | 37,767 | 37,559 | 208 | 0.6 | ||||||||||||||||||||||||||||||||||||||||||
Total depreciation and amortization | $ | 92,970 | $ | 88,394 | $ | 4,576 | 5.2 | % | $ | 267,425 | $ | 260,560 | $ | 6,865 | 2.6 | % |
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||
September 30, | 2023 over 2022 | September 30, | 2023 over 2022 | |||||||||||||||||||||||||||||||||||||||||||||||
(in thousands, except percentages) | 2023 | 2022 | Change | % Change | 2023 | 2022 | Change | % Change | ||||||||||||||||||||||||||||||||||||||||||
Loss on early extinguishment of debt | $ | — | $ | — | $ | — | — | % | $ | 2,362 | $ | — | $ | 2,362 | 100.0 | % |
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||
September 30, | 2023 over 2022 | September 30, | 2023 over 2022 | |||||||||||||||||||||||||||||||||||||||||||||||
(in thousands, except percentages) | 2023 | 2022 | Change | % Change | 2023 | 2022 | Change | % Change | ||||||||||||||||||||||||||||||||||||||||||
Gain on sale of business | $ | — | $ | — | $ | — | — | % | $ | — | $ | 8,864 | $ | (8,864) | (100.0) | % |
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||
September 30, | 2023 over 2022 | September 30, | 2023 over 2022 | |||||||||||||||||||||||||||||||||||||||||||||||
(in thousands, except percentages) | 2023 | 2022 | Change | % Change | 2023 | 2022 | Change | % Change | ||||||||||||||||||||||||||||||||||||||||||
Interest expense, net of interest income | $ | 29,696 | $ | 28,081 | $ | 1,615 | 5.8 | % | $ | 80,400 | $ | 79,354 | $ | 1,046 | 1.3 | % |
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||
September 30, | 2023 over 2022 | September 30, | 2023 over 2022 | |||||||||||||||||||||||||||||||||||||||||||||||
(in thousands, except percentages) | 2023 | 2022 | Change | % Change | 2023 | 2022 | Change | % Change | ||||||||||||||||||||||||||||||||||||||||||
Provision for income taxes | $ | 33,666 | $ | 45,311 | $ | (11,645) | (25.7) | % | $ | 102,044 | $ | 109,663 | $ | (7,619) | (6.9) | % | ||||||||||||||||||||||||||||||||||
Effective tax rate | 26.9 | % | 25.0 | % | 1.9 | % | 26.7 | % | 25.0 | % | 1.7 | % |
Nine Months Ended | ||||||||||||||
September 30, | ||||||||||||||
(in thousands) | 2023 | 2022 | ||||||||||||
Net cash from operating activities | $ | 455,692 | $ | 357,542 | ||||||||||
Net cash used in investing activities | (447,069) | (281,962) | ||||||||||||
Net cash used in financing activities | (165,322) | (72,609) |
Nine Months Ended | |||||||||||
September 30, | |||||||||||
2023 | 2022 | ||||||||||
Net cash from operating activities | $ | 455,692 | $ | 357,542 | |||||||
Additions to property, plant and equipment | (311,906) | (244,547) | |||||||||
Proceeds from sale and disposal of fixed assets | 5,129 | 5,118 | |||||||||
Adjusted free cash flow | $ | 148,915 | $ | 118,113 |
(in thousands, except percentages) | September 30, 2023 | December 31, 2022 | Change | % Change | ||||||||||||||||||||||
Closure and post-closure liabilities | $ | 119,891 | $ | 118,801 | $ | 1,090 | 0.9 | % | ||||||||||||||||||
Remedial liabilities | 111,704 | 116,290 | (4,586) | (3.9) | ||||||||||||||||||||||
Total environmental liabilities | $ | 231,595 | $ | 235,091 | $ | (3,496) | (1.5) | % |
Period | Total Number of Shares Purchased (1) | Average Price Paid Per Share (2) | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in thousands) (3) | |||||||||||||||||||
July 1, 2023 through July 31, 2023 | 34,805 | $ | 164.43 | — | 97,265 | ||||||||||||||||||
August 1, 2023 through August 31, 2023 | 60,529 | 171.24 | 58,341 | 87,265 | |||||||||||||||||||
September 1, 2023 through September 30, 2023 | 2,667 | 173.37 | — | 87,265 | |||||||||||||||||||
Total | 98,001 | $ | 168.88 | 58,341 |
Item No. | Description | Location | ||||||||||||
31.1 | Filed herewith | |||||||||||||
31.2 | Filed herewith | |||||||||||||
31.3 | Filed herewith | |||||||||||||
32 | Filed herewith | |||||||||||||
101 | Interactive Data Files Pursuant to Rule 405 of Regulation S-T: Financial statements from the quarterly report on Form 10-Q of Clean Harbors, Inc. for the quarterly period ended September 30, 2023, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Consolidated Balance Sheets, (ii) Unaudited Consolidated Statements of Operations, (iii) Unaudited Consolidated Statements of Comprehensive Income, (iv) Unaudited Consolidated Statements of Cash Flows, (v) Unaudited Consolidated Statements of Stockholders’ Equity and (vi) Notes to Unaudited Consolidated Financial Statements. | * | ||||||||||||
104 | The cover page from the Company's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2023, formatted in iXBRL and contained in Exhibit 101. |
CLEAN HARBORS, INC. | |||||||||||
Registrant | |||||||||||
By: | /s/ MICHAEL L. BATTLES | ||||||||||
Michael L. Battles | |||||||||||
Co-Chief Executive Officer and Co-President | |||||||||||
Date: | November 1, 2023 | ||||||||||
By: | /s/ ERIC W. GERSTENBERG | ||||||||||
Eric W. Gerstenberg | |||||||||||
Co-Chief Executive Officer and Co-President | |||||||||||
Date: | November 1, 2023 | ||||||||||
By: | /s/ ERIC J. DUGAS | ||||||||||
Eric J. Dugas | |||||||||||
Executive Vice President and Chief Financial Officer | |||||||||||
Date: | November 1, 2023 |
/s/ MICHAEL L. BATTLES | |||||
Michael L. Battles | |||||
Co-Chief Executive Officer and Co-President |
/s/ ERIC W. GERSTENBERG | |||||
Eric W. Gerstenberg | |||||
Co-Chief Executive Officer and Co-President |
/s/ ERIC J. DUGAS | |||||
Eric J. Dugas | |||||
Executive Vice President and Chief Financial Officer |
By: | /s/ MICHAEL L. BATTLES | ||||||||||
Michael L. Battles | |||||||||||
Co-Chief Executive Officer and Co-President | |||||||||||
Date: | November 1, 2023 | ||||||||||
By: | /s/ ERIC W. GERSTENBERG | ||||||||||
Eric W. Gerstenberg | |||||||||||
Co-Chief Executive Officer and Co-President | |||||||||||
Date: | November 1, 2023 | ||||||||||
By: | /s/ ERIC J. DUGAS | ||||||||||
Eric J. Dugas | |||||||||||
Executive Vice President and Chief Financial Officer | |||||||||||
Date: | November 1, 2023 |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
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Statement of Financial Position [Abstract] | ||
Account receivable, allowances aggregating | $ 42,342 | $ 45,253 |
Closure and post-closure liabilities, current portion | 11,425 | 13,205 |
Remedial liabilities, current portion | $ 10,334 | $ 9,918 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized shares (in shares) | 80,000,000 | 80,000,000 |
Common stock, issued shares (in shares) | 54,102,982 | 54,064,797 |
Common stock, outstanding shares (in shares) | 54,102,982 | 54,064,797 |
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
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Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
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Income Statement [Abstract] | ||||
Interest income | $ 2,877 | $ 1,103 | $ 7,833 | $ 2,159 |
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
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Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
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Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 91,340 | $ 135,799 | $ 279,507 | $ 329,270 |
Other comprehensive (loss) income, net of tax: | ||||
Unrealized gain (loss) on available-for-sale securities | 93 | (36) | 311 | (692) |
Unrealized gain on fair value of interest rate hedges | 7,801 | 23,750 | 15,528 | 59,674 |
Reclassification adjustment for interest rate hedge amounts realized in net income | (3,650) | (1,296) | (12,704) | 4,062 |
Reclassification adjustment for settlement of interest rate hedges | 0 | 0 | (5,905) | 0 |
Unfunded pension liability | 6 | 40 | (1) | 50 |
Foreign currency translation adjustments | (7,423) | (31,323) | 813 | (38,649) |
Other comprehensive (loss) income, net of tax | (3,173) | (8,865) | (1,958) | 24,445 |
Comprehensive income | $ 88,167 | $ 126,934 | $ 277,549 | $ 353,715 |
UNAUDITED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (PARENTHETICAL) - $ / shares |
Sep. 30, 2023 |
Jun. 30, 2023 |
Dec. 31, 2022 |
Sep. 30, 2022 |
Jun. 30, 2022 |
Dec. 31, 2021 |
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Statement of Stockholders' Equity [Abstract] | ||||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 |
BASIS OF PRESENTATION |
9 Months Ended |
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Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATIONThe accompanying consolidated interim financial statements are unaudited and include the accounts of Clean Harbors, Inc. and its subsidiaries (collectively, “Clean Harbors” or the “Company”) and have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission and, in the opinion of management, include all adjustments which are of a normal recurring nature and are necessary for a fair presentation of the financial position, results of operations and cash flows for the periods presented. Management has made estimates and assumptions affecting the amounts reported in the Company's consolidated interim financial statements and accompanying footnotes; actual results could differ from those estimates and judgments. The results for interim periods are not necessarily indicative of results for the entire year or any other interim periods. The financial statements presented herein should be read in conjunction with the financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. |
SIGNIFICANT ACCOUNTING POLICIES |
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Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | SIGNIFICANT ACCOUNTING POLICIES The Company's significant accounting policies are described in Note 2, "Significant Accounting Policies," in the Company's Annual Report on Form 10-K for the year ended December 31, 2022. There have been no material changes in these policies or their application except for the change described below. Segment Reporting and Goodwill Pursuant to the previous succession announcement, effective March 31, 2023, Michael L. Battles and Eric W. Gerstenberg, former Chief Financial Officer and Chief Operating Officer of the Company, respectively, were appointed Co-CEOs. As a result, the Company’s new Chief Operating Decision Maker (“CODM”) is a committee comprised of both Co-CEOs, who, going forward, will manage the business, make operating decisions and assess performance. The Company does not expect that the new CODM structure will change how the Company is managed and as such will continue to report as two operating segments; (i) the Environmental Services segment and (ii) the Safety-Kleen Sustainability Solutions segment and assess the recoverability of goodwill under three reporting units; (i) Environmental Sales and Service, (ii) Environmental Facilities and (iii) Safety-Kleen Sustainability Solutions.
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REVENUES |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
REVENUES | REVENUES The Company generates revenues through the following operating segments: Environmental Services and Safety-Kleen Sustainability Solutions. The Company's Environmental Services operating segment generally has four sources of revenue and the Safety-Kleen Sustainability Solutions operating segment has two sources of revenue. The Company disaggregates third-party revenues by geographic location and source of revenue as management believes these categories depict how revenue and cash flows are affected by economic factors. The Company's significant sources of revenue include: Technical Services—Technical Services contribute to the revenues of the Environmental Services operating segment. Revenues for these services are generated from fees charged for waste material management and disposal services including onsite environmental management services, collection and transportation, packaging, recycling, treatment and disposal of waste and large remediation projects. Revenue is primarily generated by short-term projects, most of which are governed by master service agreements that are long-term in nature. These master service agreements are typically entered into with the Company's larger customers and outline the pricing and legal frameworks for such arrangements. Services are provided based on purchase orders or agreements with the customer and include prices based upon units of volume of waste, material and personnel costs as well as transportation and other fees. Collection and transportation revenues are recognized over time, as the customer receives and consumes the benefits of the services as they are being performed and the Company has a right to payment for performance completed to date. The Company uses the input method to recognize revenue over time, based on time and materials incurred as a basis for measuring the satisfaction of the performance obligation. Revenues for treatment and disposal of waste are recognized upon completion of treatment, final disposition in a landfill or incinerator, or when the waste is shipped to a third-party for processing and disposal. The Company periodically enters into bundled arrangements for the collection and transportation and disposal of waste. For such arrangements, transportation and disposal are considered distinct performance obligations and the Company allocates revenue to each based on the relative standalone selling price (i.e., the estimated price that a customer would pay for the services on a standalone basis). Revenues and the related costs from waste that is not yet completely processed and disposed of are deferred. The deferred revenues and costs are recognized when the services are completed. The period between collection and transportation and the final processing and disposal ranges depending on the location of the customer, but generally is measured in days. Industrial Services and Other—Industrial Services contribute to the revenues of the Environmental Services operating segment. These revenues are primarily generated from industrial and specialty services provided to refineries, chemical plants, manufacturing facilities, power generation companies, pulp and paper mills, mines and other industrial customers throughout North America. Services include in-plant cleaning and maintenance services, plant outage and turnaround services, specialty cleaning services including chemical cleaning, pigging and high and ultra-high pressure water cleaning, leak detection and repair, daylighting, production services and upstream energy services. Services are provided based on purchase orders or agreements with the customer and include prices based upon daily, hourly or job rates for equipment, materials and personnel. The Company recognizes revenue for these services over time, as the customer receives and consumes the benefits of the services as they are being performed and the Company has a right to payment for performance completed to date. The Company uses the input method to recognize revenue over time, based on time and materials incurred. Field and Emergency Response Services—Field and Emergency Response Services contribute to the revenues of the Environmental Services operating segment. Field Services revenues are generated from cleanup services at customer sites, including those managed by municipalities and utility providers, or other locations on a scheduled or emergency response basis. Services include confined space entry for tank cleaning, site decontamination, remediation, railcar cleaning, manhole/vault clean outs, product recovery and transfer and vacuum services. Additional services include filtration and water treatment services. Response services for environmental emergencies of any scale range from man-made disasters such as oil spills to natural disasters like hurricanes. Emergency response services also include spill cleanup on land and water, as well as contagion disinfection, decontamination and disposal services. Field and emergency response services are provided based on purchase orders or agreements with customers and include prices generally based upon daily, hourly or job rates for equipment, materials and personnel. The Company recognizes revenue for these services over time, as the customer receives and consumes the benefits of the services as they are being performed and the Company has a right to payment for performance completed to date. The Company uses the input method to recognize revenue over time, based on time and materials incurred. The duration of such services can be over a number of hours, several days or even months for larger scale projects. Safety-Kleen Environmental Services—Safety-Kleen Environmental Services revenues contribute both to the Environmental Services operating segment and the Safety-Kleen Sustainability Solutions operating segment depending upon the nature of such revenues and operating responsibilities relative to executing the revenue contracts. Revenues from providing containerized waste handling and disposal services, parts washer services and vacuum services, referred to collectively as the Safety-Kleen branches' core service offerings, contribute to the revenues of the Environmental Services operating segment. In addition, sales of packaged blended oil products and other complementary product sales contribute to the revenues of the Environmental Services operating segment. Revenues generated from waste oil, anti-freeze and oil filter collection services, sales of bulk blended oil products and sales of bulk automotive fluids contribute to the Safety-Kleen Sustainability Solutions operating segment. Generally, the revenue from services is recognized over time, as the customer receives and consumes the benefits of the services as they are being performed and the Company has a right to payment for performance completed to date. The duration of such services can be over a number of hours or several days. The Company uses the input method to recognize revenue over time, based on time and materials incurred. Product revenue is recognized upon the transfer of control whereby control transfers when the products are delivered to the customer. Containerized waste services consist of profiling, collecting, transporting and recycling or disposing of a wide variety of waste. Related collection and transportation revenues are recognized over time, as the customer receives and consumes the benefits of the services as they are being performed and the Company has a right to payment for performance completed to date. Parts washer services include customer use of the Company's parts washer equipment, cleaning and maintenance of the parts washer equipment and removal and replacement of used cleaning fluids. Parts washer services are considered a single performance obligation due to the highly integrated and interdependent nature of the arrangement. Revenue from parts washer services is recognized over the service interval as the customer receives the benefit of the services. Safety-Kleen Oil—Safety-Kleen Oil related sales contribute to the revenues of the Safety-Kleen Sustainability Solutions segment. These revenues are generated from sales of high-quality base and blended lubricating oils to third-party distributors, government agencies, fleets, railroads and industrial customers. The business also sells recycled fuel oil to asphalt plants, industrial plants and pulp and paper companies. The used oil is also processed into vacuum gas oil which can be further re-refined into lubricant base oils or sold directly into the marine diesel oil fuel market. Revenue for oil products is recognized at a point in time, upon the transfer of control. Control transfers when the products are delivered to the customer. The following tables present the Company's third-party revenue disaggregated by source of revenue and geography (in thousands):
Contract Balances
The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets) and customer advances and deposits or deferred revenue (contract liabilities) on the consolidated balance sheet. Generally, billing occurs subsequent to revenue recognition, as a right to payment is not just subject to passage of time, resulting in contract assets, which are generally classified as current. The Company sometimes receives advances or deposits from its customers before revenue is recognized, resulting in contract liabilities. These assets and liabilities are reported on the consolidated balance sheet on a contract-by-contract basis at the end of each reporting period. The contract liability balances at the beginning of each period presented were generally fully recognized in the subsequent three-month period.
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BUSINESS COMBINATIONS |
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BUSINESS COMBINATIONS | BUSINESS COMBINATIONS 2023 Acquisition On March 31, 2023, the Company acquired Thompson Industrial Services, LLC ("Thompson Industrial") for an all-cash purchase price of $110.9 million, net of cash acquired. In the third quarter of 2023, the Company received $1.0 million after finalizing the acquisition date working capital balances, which decreased the overall purchase price. The operations of Thompson Industrial expand the Environmental Services segment's industrial service operations in the southeastern region of the United States. The preliminary allocation of the purchase price is provisional and was based on estimates of the fair value of assets acquired and liabilities assumed as of the acquisition date. The Company continues to obtain information to complete the valuation of these balances and the associated income tax accounting. Measurement period adjustments will reflect new information obtained about facts and circumstances that existed as of the acquisition date. The following table summarizes the preliminary determination and recognition of assets acquired and liabilities assumed (in thousands):
Permits and other intangible assets acquired include customer relationships, trademarks/tradenames and non-compete agreements and are anticipated to have estimated useful lives of between and 15 years with a weighted average useful life of approximately 13 years. The excess of the total purchase price, which includes the aggregate cash consideration paid in excess of the fair value of the tangible and intangible assets acquired and liabilities assumed, was recorded as goodwill. The goodwill recognized is attributable to the expected operating synergies, assembled workforce and growth potential that the Company expects to realize from the acquisition. Goodwill generated from the acquisition is deductible for tax purposes. The operations included in the Company's financial statements for the three and nine months ended September 30, 2023, and pro forma revenue and earnings amounts on a combined basis as if this acquisition had been completed on January 1, 2022 are immaterial to the consolidated financial statements of the Company. 2022 Acquisitions On June 17, 2022, the Company acquired a privately-owned company for an all-cash purchase price of approximately $78.9 million, net of cash acquired. The operations of the newly acquired company expand the Safety-Kleen Sustainability Solutions segment's waste oil collection capabilities and re-refining business throughout the southeastern region of the United States, including the addition of a re-refinery in Georgia. The Company finalized the purchase accounting for this acquisition. The allocation of the purchase price was based on estimates of the fair value and assets acquired and liabilities assumed as of June 17, 2022. The following table summarizes the final determination and recognition of assets acquired and liabilities assumed (in thousands):
Permits and other intangible assets acquired include supplier relationships, permits, customer relationships and trademarks/tradenames and are anticipated to have estimated useful lives of between and 20 years with a weighted average useful life of approximately 18 years. The excess of the total purchase price, which includes the aggregate cash consideration paid in excess of the fair value of the tangible and intangible assets acquired, was recorded as goodwill. The goodwill recognized is attributable to the expected operating synergies, assembled workforce and growth potential that the Company expects to realize from the acquisition. Goodwill generated from the acquisition is deductible for tax purposes. On December 9, 2022, the Company acquired a privately-owned business for $12.6 million cash consideration. The acquired company expands the Safety-Kleen Sustainability Solutions segment's oil collection operations in the southeastern region of the United States. In connection with this acquisition, goodwill of $2.6 million was recognized. The results of operations for the acquired business were not material in 2022.
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DISPOSITION OF BUSINESS |
9 Months Ended |
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Sep. 30, 2023 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISPOSITION OF BUSINESS | DISPOSITION OF BUSINESSOn June 30, 2022, the Company completed the sale of a line of business as part of its continuous focus on divesting certain non-core operations. The divested line of business was previously included within the Environmental Sales & Service reporting unit of the Environmental Services segment. The Company determined that the disposition did not constitute a strategic shift and that the impact on the Company's overall operations and financial results is not be material. Accordingly, the operations associated with the disposal were not reported in discontinued operations. The final purchase price for the line of business was $18.8 million, after settling working capital. The gain on sale of $8.9 million, after accounting for the assets sold, liabilities transferred upon sale and transaction costs, was included in gain on sale of business in the Company's consolidated statement of operations for the nine months ended September 30, 2022. |
INVENTORIES AND SUPPLIES |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVENTORIES AND SUPPLIES | INVENTORIES AND SUPPLIES Inventories and supplies consisted of the following (in thousands):
Supplies inventories consist primarily of critical spare parts to support the Company's incinerator and re-refinery operations and other general supplies used in our normal day-to-day operations. Other inventories consist primarily of parts washer components, cleaning fluids, absorbents and automotive fluids, such as windshield washer fluid and antifreeze.
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PROPERTY, PLANT AND EQUIPMENT |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PROPERTY, PLANT AND EQUIPMENT | PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment consisted of the following (in thousands):
________________ (1) Balances inclusive of gross right-of-use ("ROU") assets classified as finance leases of $8.0 million in both periods. (2) Balances inclusive of gross ROU assets classified as finance leases of $132.5 million and $106.7 million, respectively. (3) Balances inclusive of gross ROU assets classified as finance leases of $9.2 million in both periods. Depreciation expense, inclusive of landfill and finance lease amortization, was $80.4 million and $229.7 million for the three and nine months ended September 30, 2023, respectively. Depreciation expense, inclusive of landfill and finance lease amortization, was $75.3 million and $223.0 million for the three and nine months ended September 30, 2022, respectively. The Company recorded $1.7 million and $4.4 million of capitalized interest during the three and nine months ended September 30, 2023, respectively. The Company recorded $0.9 million and $2.0 million of capitalized interest during the three and nine months ended September 30, 2022, respectively. The capitalized interest in all periods is mainly due to the construction of a new incinerator in Kimball, Nebraska.
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GOODWILL AND OTHER INTANGIBLE ASSETS |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GOODWILL AND OTHER INTANGIBLE ASSETS | GOODWILL AND OTHER INTANGIBLE ASSETS The changes in goodwill by segment for the nine months ended September 30, 2023 were as follows (in thousands):
The Company assesses goodwill on an annual basis as of December 31 or at an interim date when events or changes in the business environment (“triggering events”) would more likely than not reduce the fair value of a reporting unit below its carrying value. During the period ended September 30, 2023, no such triggering events were identified. As of September 30, 2023 and December 31, 2022, the Company's intangible assets consisted of the following (in thousands):
Amortization expense of permits, customer and supplier relationships and other intangible assets was $12.5 million and $37.8 million in the three and nine months ended September 30, 2023, respectively. Amortization expense of permits, customer and supplier relationships and other intangible assets was $13.1 million and $37.6 million in the three and nine months ended September 30, 2022, respectively. The expected amortization of the net carrying amount of finite-lived intangible assets at September 30, 2023 was as follows (in thousands):
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ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES |
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities consisted of the following (in thousands):
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CLOSURE AND POST-CLOSURE LIABILITIES |
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Asset Retirement Obligation Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CLOSURE AND POST-CLOSURE LIABILITIES | CLOSURE AND POST-CLOSURE LIABILITIES The changes to closure and post-closure liabilities (also referred to as “asset retirement obligations”) from January 1, 2023 through September 30, 2023 were as follows (in thousands):
During the first quarter of 2023, the Company's non-commercial landfill at the Deer Park, Texas incineration facility reached its permitted capacity, as expected. The Company has commenced closure activities; however, there have been no changes to the liabilities related to this location. In the nine months ended September 30, 2023, there were no significant benefits or charges resulting from changes in estimates for closure and post-closure liabilities.
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REMEDIAL LIABILITIES |
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Environmental Remediation Obligations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
REMEDIAL LIABILITIES | REMEDIAL LIABILITIES The changes to remedial liabilities from January 1, 2023 through September 30, 2023 were as follows (in thousands):
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FINANCING ARRANGEMENTS |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FINANCING ARRANGEMENTS | FINANCING ARRANGEMENTS Long-term Debt The following table is a summary of the Company’s long-term debt (in thousands):
Financing Activities The Company's significant financing arrangements are described in Note 12, "Financing Arrangements," in the Company's Annual Report on Form 10-K for the year ended December 31, 2022 and, other than as noted below, there have been no material changes to the arrangements described therein. As previously disclosed, on January 24, 2023, the Company completed a private placement of $500.0 million aggregate principal amount of unsecured senior notes which mature on February 1, 2031 (collectively referred to with the 2027 and 2029 Notes as the "Notes"). The proceeds from the 2031 Notes, along with a $114.0 million borrowing on the Company's revolving credit facility and available cash, were used to repay the $614.0 million outstanding principal amount of the 2024 Term Loans. In connection with the repayment, the Company recognized a loss on early extinguishment of debt of $2.4 million in the first quarter of 2023. The Company maintains a $400.0 million revolving credit facility under which the Company had no outstanding loan balance as of September 30, 2023 and December 31, 2022. During the three months ended March 31, 2023, the Company borrowed $114.0 million on the revolving credit facility to repay the outstanding principal amount of the 2024 Term Loans. The Company repaid the full amount of this borrowing on the revolving credit facility. As of September 30, 2023, the Company had $277.6 million available to borrow under the revolving credit facility and outstanding letters of credit were $122.4 million. Subject to certain conditions, this credit facility will expire in October 2025. As of September 30, 2023 and December 31, 2022, the estimated fair value of the Company’s outstanding long-term debt, including the current portion, was $2.2 billion and $2.4 billion, respectively. The Company’s estimates of fair value of its long-term debt, including the current portion, are based on quoted market prices or other available market data which are considered Level 2 measures according to the fair value hierarchy. Level 2 utilizes quoted market prices in markets that are not active, broker or dealer quotation or alternative pricing sources with reasonable levels of price transparency for similar assets and liabilities. Upon the phase-out of LIBOR as a referenced rate, the Company has transitioned all of its variable rate debt to a successor rate, namely Term SOFR. As of September 30, 2023, after taking into account the interest rate swaps discussed under the "Cash Flow Hedges" header below, the Company's variable rate debt consists of $382.5 million of the 2028 Term Loans and any borrowings under the revolving credit facility. In accordance with the October 8, 2021 amendment to the credit agreement, the 2028 Term Loan will generally bear interest at a rate of Term SOFR plus an adjustment of 0.11448%, based upon one-month Term SOFR. The Term Loan Agreement also provides for Term SOFR adjustments for other interest periods; however, the Company expects to elect the one-month Term SOFR for interest payments on that debt. The 2.00% margin applicable to the 2028 Term Loans prior to the phase-out of LIBOR also remains applicable to the interest payments under Term SOFR, so in total, the 2028 Term Loan will bear interest at Term SOFR plus 2.11448%. The Company expects these changes will not be material to future financial results. On April 28, 2023, the Company entered into an amendment to the credit agreement for the revolving credit facility. As amended, the terms of the agreement are substantially the same as prior to the amendment except for certain updates required to transition the agreement to include a defined LIBOR successor rate. Under the amended agreement, borrowings under the revolving credit facility will bear interest at a rate, at the Company’s option, of either (i) “Term SOFR” (as defined in the amended agreement) plus an applicable margin ranging from 1.50% to 1.75% per annum based primarily on the level of the Company’s average liquidity for the most recent 30 day period or (ii) Bank of America's base rate plus an applicable margin ranging from 0.50% to 0.75% per annum based primarily on such average liquidity. The amended agreement also continues to provide (i) for an unused line fee payable to the lenders, calculated on the then unused portion of the lenders’ $400.0 million maximum commitments, ranging from 0.25% to 0.375% per annum of the unused commitment, and (ii) for outstanding letters of credit, a fee payable to the lenders equal to the then applicable margin for Term SOFR borrowings described above, and to the issuing banks a standard fronting fee and customary fees and charges in connection with all amendments, extensions, draws and other actions with respect to letters of credit. The Company expects these changes will not be material to future financial results. Cash Flow Hedges The Company's strategy to hedge against fluctuations in variable interest rates involves entering into interest rate derivative agreements. The Company effectively fixed the interest rate on $350.0 million principal of the previously outstanding 2024 Term Loans by entering into interest rate swap agreements in 2018 with a notional amount of $350.0 million ("2018 Swaps"). On January 24, 2023, concurrently with the repayment of the 2024 Term Loans, the Company received a settlement payment of $8.3 million from the counterparties. As a result of the settlement, the Company also reclassified the amounts previously deferred in accumulated other comprehensive loss and recognized a settlement gain of $8.3 million in interest expense during the three months ended March 31, 2023. In 2022, the Company entered into interest rate swap agreements with a notional amount of $600.0 million ("2022 Swaps") to effectively fix the interest rate on $600.0 million principal of the outstanding 2028 Term Loans. Under the terms of the 2022 Swaps' agreements, the Company receives interest based upon the variable rates on the 2028 Term Loans and pays a fixed amount of interest. The fixed rate on these instruments was 0.931% through June 30, 2023 which, together with the 2.00% interest rate margin for borrowings on the 2028 Term Loans, resulted in an effective annual interest rate of approximately 2.931% through June 30, 2023. The fixed rate on these instruments increased to 1.9645% on July 1, 2023 and the variable rate became linked to Term SOFR to mirror the variable interest payments for the 2028 Term Loans. Including the 2.00% interest rate margin for borrowings on the 2028 Term Loans and the 0.11448% SOFR adjustment per the 2028 Term Loans, beginning July 1, 2023, the effective annual interest rate of this $600.0 million is now 4.07898%. The 2022 Swaps expire September 30, 2027. At the inception of these instruments, the Company designated both the 2018 Swaps and the 2022 Swaps (collectively referred to as the “Swaps”) as cash flow hedges. As of September 30, 2023, the Company recorded a derivative asset with a fair value of $54.8 million comprised only of the 2022 Swaps as the 2018 Swaps were settled in early 2023, as noted above. The balance of the derivative asset as of December 31, 2022 was $60.6 million, which included both of the Swaps. No ineffectiveness has been identified on the Swaps and, therefore the change in fair value is recorded in stockholders' equity as a component of accumulated other comprehensive loss. Amounts are reclassified from accumulated other comprehensive loss into interest expense on the consolidated statement of operations in the same period or periods during which the hedged transactions affect earnings.
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EARNINGS PER SHARE |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EARNINGS PER SHARE | EARNINGS PER SHARE The following are computations of basic and diluted earnings per share (in thousands, except per share amounts):
For the three months ended September 30, 2023 and 2022, all outstanding performance awards and restricted stock awards were included in the calculation of diluted earnings per share except for 103,454 and 81,341, respectively, of performance stock awards for which the performance criteria were not attained at the reporting dates and 6,550 and 10,043, respectively, of restricted stock awards which were excluded as their inclusion would have an antidilutive effect. For the nine months ended September 30, 2023 and 2022, all outstanding performance awards and restricted stock awards were included in the calculation of diluted earnings per share except for 103,454 and 81,341, respectively, of performance stock awards for which the performance criteria were not attained at the reporting dates and 14,050 and 13,500, respectively, of restricted stock awards which were excluded as their inclusion would have an antidilutive effect.
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ACCUMULATED OTHER COMPREHENSIVE LOSS |
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Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACCUMULATED OTHER COMPREHENSIVE LOSS | ACCUMULATED OTHER COMPREHENSIVE LOSS The changes in accumulated other comprehensive loss by component and related tax impacts for the nine months ended September 30, 2023 were as follows (in thousands):
The amount realized in the consolidated statement of operations during the three and nine months ended September 30, 2023 which was reclassified out of accumulated other comprehensive loss was as follows (in thousands):
(1) For the nine months ended September 30, 2023, the balance is inclusive of an $8.3 million gain realized in connection with the settlement of the 2018 Swaps. For more information on this transaction, see Note 12, "Financing Arrangements."
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STOCK-BASED COMPENSATION |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATIONTotal stock-based compensation cost charged to selling, general and administrative expenses for the three and nine months ended September 30, 2023 was $4.3 million and $14.8 million, respectively. Total stock-based compensation cost charged to selling, general and administrative expenses for the three and nine months ended September 30, 2022 was $7.8 million and $20.4 million, respectively. The total income tax benefit recognized in the consolidated statements of operations from stock-based compensation expense for the three and nine months ended September 30, 2023 was $0.7 million and $2.4 million, respectively. The total income tax benefit recognized in the consolidated statements of operations from stock-based compensation expense for the three and nine months ended September 30, 2022 was $1.5 million and $3.8 million, respectively. Restricted Stock Awards The following table summarizes information about restricted stock awards for the nine months ended September 30, 2023:
As of September 30, 2023, there was $32.5 million of total unrecognized compensation cost arising from restricted stock awards. This cost is expected to be recognized over a weighted average period of 3.0 years. The total fair value of restricted stock vested during the three and nine months ended September 30, 2023 was $16.6 million and $24.6 million, respectively. The total fair value of restricted stock vested during the three and nine months ended September 30, 2022 was $9.1 million and $14.7 million, respectively. Performance Stock Awards Performance stock awards are subject to performance criteria established by the Compensation Committee of the Company's Board of Directors prior to or at the date of grant. The vesting of the performance stock awards is based on achieving targets currently based on revenue, Adjusted EBITDA Margin, Return on Invested Capital and Total Recordable Incident Rate. In addition, performance stock awards include continued service conditions. The following table summarizes information about performance stock awards for the nine months ended September 30, 2023:
As of September 30, 2023, there was $3.7 million of total unrecognized compensation cost arising from unvested performance stock awards deemed probable of vesting. The total fair value of performance awards vested during the three and nine months ended September 30, 2023 was $1.7 million and $9.6 million, respectively. The total fair value of performance awards vested during the three and nine months ended September 30, 2022 was $1.0 million and $4.7 million, respectively.
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COMMITMENTS AND CONTINGENCIES |
9 Months Ended |
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Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIESThe Company and its subsidiaries are subject to legal proceedings and claims arising in the ordinary course of business. Actions filed against the Company arise from commercial and employment-related claims including alleged class actions related to sales practices and wage and hour claims. The plaintiffs in these actions may be seeking damages or injunctive relief or both. These actions are in various jurisdictions and stages of proceedings, and some are covered in part by insurance. In addition, the Company’s waste management services operations are regulated by federal, state, provincial and local laws enacted to regulate discharge of materials into the environment, remediation of contaminated soil and groundwater or otherwise protect the environment. This ongoing regulation results in the Company frequently becoming a party to legal or administrative proceedings involving all levels of government authorities and other interested parties. The issues involved in such proceedings generally relate to alleged violations of existing permits and licenses or alleged responsibility under federal or state Superfund laws to remediate contamination at properties owned either by the Company or by other parties (“third-party sites”) to which either the Company or the prior owners of certain of the Company’s facilities shipped waste. At September 30, 2023 and December 31, 2022, the Company had recorded reserves of $31.0 million and $37.1 million, respectively, for actual or probable liabilities related to the legal and administrative proceedings in which the Company was then involved, the principal of which are described below. As of September 30, 2023 and December 31, 2022, the $31.0 million and $37.1 million, respectively, of reserves consisted of (i) $24.2 million and $24.1 million, respectively, related to pending legal or administrative proceedings, including Superfund liabilities, which were included in remedial liabilities on the consolidated balance sheets, and (ii) $6.8 million and $13.0 million, respectively, primarily related to federal, state and provincial enforcement actions, which were included in accrued expenses on the consolidated balance sheets. In management's opinion, it is not reasonably possible that the potential liability beyond what has been recorded, if any, that may result from these actions, either individually or collectively, will have a material effect on the Company's financial position, results of operations or cash flows. The Company periodically adjusts the aggregate amount of these reserves when actual or probable liabilities are paid or otherwise discharged, new claims arise, or additional relevant information about existing or probable claims becomes available. Legal or Administrative Proceedings As of September 30, 2023, the principal legal and administrative proceedings in which the Company was involved, or which had been terminated during 2023, relate to Safety-Kleen product liability cases and Superfund proceedings. Safety-Kleen Product Liability Cases: Safety-Kleen, Inc. ("Safety-Kleen"), which is a legal entity acquired by the Company in 2012, has been named as a defendant in certain product liability cases that are currently pending in various courts and jurisdictions throughout the United States. As of September 30, 2023, there were approximately 65 proceedings (excluding cases which have been settled but not formally dismissed) wherein persons claim personal injury resulting from the use of Safety-Kleen's parts cleaning equipment or cleaning products. These proceedings typically involve allegations that the solvent used in Safety-Kleen's parts cleaning equipment contains contaminants and/or that Safety-Kleen's recycling process does not effectively remove the contaminants that become entrained in the solvent during their use. In addition, certain claimants assert that Safety-Kleen failed to warn adequately the product user of potential risks, including a historic failure to warn that solvent contains trace amounts of toxic or hazardous substances such as benzene. The Company maintains insurance that it believes will provide coverage for these product liability claims (over amounts accrued for self-insured retentions and deductibles in certain limited cases), except for punitive damages to the extent not insurable under state law or excluded from insurance coverage. The Company also believes that these claims lack merit and historically has vigorously defended, and intends to continue to vigorously defend itself and the safety of its products against all of these claims. Such matters are subject to many uncertainties and outcomes are not predictable with assurance. Consequently, the Company is unable to ascertain the ultimate aggregate amount of monetary liability or financial impact with respect to these matters as of September 30, 2023. From January 1, 2023 to September 30, 2023, 15 product liability claims were settled or dismissed. Due to the nature of these claims and the related insurance, the Company did not incur any expense as insurance provided coverage in full for all such claims. Safety-Kleen may be named in similar, additional lawsuits in the future, including claims for which insurance coverage may not be available. Superfund Proceedings: The Company has been notified that either the Company (which, since December 28, 2012, has included Safety-Kleen) or the prior owners of certain of the Company's facilities for which the Company may have certain indemnification obligations have been identified as potentially responsible parties ("PRPs") or potential PRPs in connection with 131 sites which are subject to or are proposed to become subject to proceedings under federal or state Superfund laws. Of the 131 Superfund related sites, six involve facilities that are now owned or leased by the Company and 125 involve third-party sites to which either the Company or the prior owners of certain of the Company’s facilities shipped waste. Of the 125 third-party sites, 30 are now settled, 14 are currently requiring expenditures on remediation and 81 are not currently requiring expenditures on remediation. In connection with each site, the Company has estimated the extent, if any, to which it may be subject, either directly or as a result of any indemnification obligations, for cleanup and remediation costs, related legal and consulting costs associated with PRP investigations, settlements and related legal and administrative proceedings. The amount of such actual and potential liability is inherently difficult to estimate because of, among other relevant factors, uncertainties as to the legal liability (if any) of the Company or the prior owners of certain of the Company's facilities to contribute a portion of the cleanup costs, the assumptions that must be made in calculating the estimated cost and timing of remediation, the identification of other PRPs and their respective capability and obligation to contribute to remediation efforts and the existence and legal standing of indemnification agreements (if any) with prior owners, which may either benefit the Company or subject the Company to potential indemnification obligations. The Company believes its potential monetary liability could exceed $1.0 million at three of the 131 Superfund related sites. Of the 125 third-party sites at which the Company has been notified it is a PRP or potential PRP or may have indemnification obligations, the Company has indemnification agreements at a total of 17 sites. These agreements indemnify the Company (which now includes Safety-Kleen) with respect to any liability at the 17 sites for waste disposed prior to the Company's (or Safety-Kleen's) acquisition of the former subsidiaries of Waste Management and McKesson which had shipped waste to those sites. Accordingly, the indemnifying parties are paying all costs of defending those subsidiaries in those 17 cases, including legal fees and settlement costs. However, there can be no guarantee that the Company's ultimate liabilities for those sites will not exceed the amount recorded or that indemnities applicable to any of these sites will be available to pay all or a portion of related costs. Except for those indemnification agreements discussed, the Company does not have an indemnity agreement with respect to any of the 125 third-party sites discussed above. Federal, State and Provincial Enforcement Actions From time to time, the Company pays fines or penalties in regulatory proceedings relating primarily to waste treatment, storage or disposal facilities. As of September 30, 2023 there were no proceedings for which the Company believes it is possible that the sanctions could equal or exceed $1.0 million. As of December 31, 2022, there was one proceeding for which the Company believed it was possible that the sanctions could equal or exceed $1.0 million. The Company believes that the fines or other penalties in this or any of the other regulatory proceedings will, individually or in the aggregate, not have a material effect on its financial condition, results of operations or cash flows.
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SEGMENT REPORTING |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT REPORTING | SEGMENT REPORTING Segment reporting is prepared on the same basis that the Company's chief operating decision maker, which is a committee comprised of the Company's co-Chief Executive Officers, manages the business, makes operating decisions and assesses performance. The Company is managed and reports as two operating segments; (i) the Environmental Services segment and (ii) the Safety-Kleen Sustainability Solutions segment. Third-party revenue is revenue billed to outside customers by a particular segment. Direct revenues is revenue allocated to the segment providing the product or service. Intersegment revenues represent the sharing of third-party revenues among the segments based on products and services provided by each segment as if the products and services were sold directly to the third-party. The intersegment revenues are shown net. The operations not managed through the Company’s operating segments described above are recorded as “Corporate Items.” The following tables reconcile third-party revenues to direct revenues for the three and nine months ended September 30, 2023 and 2022 (in thousands):
The primary financial measure by which the Company evaluates the performance of its segments is Adjusted EBITDA, which consists of net income plus accretion of environmental liabilities, stock-based compensation, depreciation and amortization, net interest expense, loss on early extinguishment of debt and provision for income taxes and excludes other gains, losses and non-cash charges not deemed representative of fundamental segment results and other income (expense), net. Transactions between the segments are accounted for at the Company’s best estimate based on similar transactions with outside customers. The following table presents Adjusted EBITDA information used by management by reported segment (in thousands):
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Pay vs Performance Disclosure - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||||||
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Sep. 30, 2023 |
Jun. 30, 2023 |
Mar. 31, 2023 |
Sep. 30, 2022 |
Jun. 30, 2022 |
Mar. 31, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
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Pay vs Performance Disclosure | ||||||||
Net income | $ 91,340 | $ 115,766 | $ 72,401 | $ 135,799 | $ 148,157 | $ 45,314 | $ 279,507 | $ 329,270 |
Insider Trading Arrangements |
3 Months Ended |
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Sep. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
SIGNIFICANT ACCOUNTING POLICIES (Policies) |
9 Months Ended |
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Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Segment Reporting | Segment Reporting and Goodwill Pursuant to the previous succession announcement, effective March 31, 2023, Michael L. Battles and Eric W. Gerstenberg, former Chief Financial Officer and Chief Operating Officer of the Company, respectively, were appointed Co-CEOs. As a result, the Company’s new Chief Operating Decision Maker (“CODM”) is a committee comprised of both Co-CEOs, who, going forward, will manage the business, make operating decisions and assess performance. The Company does not expect that the new CODM structure will change how the Company is managed and as such will continue to report as two operating segments; (i) the Environmental Services segment and (ii) the Safety-Kleen Sustainability Solutions segment and assess the recoverability of goodwill under three reporting units; (i) Environmental Sales and Service, (ii) Environmental Facilities and (iii) Safety-Kleen Sustainability Solutions.
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Goodwill | Segment Reporting and Goodwill Pursuant to the previous succession announcement, effective March 31, 2023, Michael L. Battles and Eric W. Gerstenberg, former Chief Financial Officer and Chief Operating Officer of the Company, respectively, were appointed Co-CEOs. As a result, the Company’s new Chief Operating Decision Maker (“CODM”) is a committee comprised of both Co-CEOs, who, going forward, will manage the business, make operating decisions and assess performance. The Company does not expect that the new CODM structure will change how the Company is managed and as such will continue to report as two operating segments; (i) the Environmental Services segment and (ii) the Safety-Kleen Sustainability Solutions segment and assess the recoverability of goodwill under three reporting units; (i) Environmental Sales and Service, (ii) Environmental Facilities and (iii) Safety-Kleen Sustainability Solutions.
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Revenue recognition | The Company generates revenues through the following operating segments: Environmental Services and Safety-Kleen Sustainability Solutions. The Company's Environmental Services operating segment generally has four sources of revenue and the Safety-Kleen Sustainability Solutions operating segment has two sources of revenue. The Company disaggregates third-party revenues by geographic location and source of revenue as management believes these categories depict how revenue and cash flows are affected by economic factors. The Company's significant sources of revenue include: Technical Services—Technical Services contribute to the revenues of the Environmental Services operating segment. Revenues for these services are generated from fees charged for waste material management and disposal services including onsite environmental management services, collection and transportation, packaging, recycling, treatment and disposal of waste and large remediation projects. Revenue is primarily generated by short-term projects, most of which are governed by master service agreements that are long-term in nature. These master service agreements are typically entered into with the Company's larger customers and outline the pricing and legal frameworks for such arrangements. Services are provided based on purchase orders or agreements with the customer and include prices based upon units of volume of waste, material and personnel costs as well as transportation and other fees. Collection and transportation revenues are recognized over time, as the customer receives and consumes the benefits of the services as they are being performed and the Company has a right to payment for performance completed to date. The Company uses the input method to recognize revenue over time, based on time and materials incurred as a basis for measuring the satisfaction of the performance obligation. Revenues for treatment and disposal of waste are recognized upon completion of treatment, final disposition in a landfill or incinerator, or when the waste is shipped to a third-party for processing and disposal. The Company periodically enters into bundled arrangements for the collection and transportation and disposal of waste. For such arrangements, transportation and disposal are considered distinct performance obligations and the Company allocates revenue to each based on the relative standalone selling price (i.e., the estimated price that a customer would pay for the services on a standalone basis). Revenues and the related costs from waste that is not yet completely processed and disposed of are deferred. The deferred revenues and costs are recognized when the services are completed. The period between collection and transportation and the final processing and disposal ranges depending on the location of the customer, but generally is measured in days. Industrial Services and Other—Industrial Services contribute to the revenues of the Environmental Services operating segment. These revenues are primarily generated from industrial and specialty services provided to refineries, chemical plants, manufacturing facilities, power generation companies, pulp and paper mills, mines and other industrial customers throughout North America. Services include in-plant cleaning and maintenance services, plant outage and turnaround services, specialty cleaning services including chemical cleaning, pigging and high and ultra-high pressure water cleaning, leak detection and repair, daylighting, production services and upstream energy services. Services are provided based on purchase orders or agreements with the customer and include prices based upon daily, hourly or job rates for equipment, materials and personnel. The Company recognizes revenue for these services over time, as the customer receives and consumes the benefits of the services as they are being performed and the Company has a right to payment for performance completed to date. The Company uses the input method to recognize revenue over time, based on time and materials incurred. Field and Emergency Response Services—Field and Emergency Response Services contribute to the revenues of the Environmental Services operating segment. Field Services revenues are generated from cleanup services at customer sites, including those managed by municipalities and utility providers, or other locations on a scheduled or emergency response basis. Services include confined space entry for tank cleaning, site decontamination, remediation, railcar cleaning, manhole/vault clean outs, product recovery and transfer and vacuum services. Additional services include filtration and water treatment services. Response services for environmental emergencies of any scale range from man-made disasters such as oil spills to natural disasters like hurricanes. Emergency response services also include spill cleanup on land and water, as well as contagion disinfection, decontamination and disposal services. Field and emergency response services are provided based on purchase orders or agreements with customers and include prices generally based upon daily, hourly or job rates for equipment, materials and personnel. The Company recognizes revenue for these services over time, as the customer receives and consumes the benefits of the services as they are being performed and the Company has a right to payment for performance completed to date. The Company uses the input method to recognize revenue over time, based on time and materials incurred. The duration of such services can be over a number of hours, several days or even months for larger scale projects. Safety-Kleen Environmental Services—Safety-Kleen Environmental Services revenues contribute both to the Environmental Services operating segment and the Safety-Kleen Sustainability Solutions operating segment depending upon the nature of such revenues and operating responsibilities relative to executing the revenue contracts. Revenues from providing containerized waste handling and disposal services, parts washer services and vacuum services, referred to collectively as the Safety-Kleen branches' core service offerings, contribute to the revenues of the Environmental Services operating segment. In addition, sales of packaged blended oil products and other complementary product sales contribute to the revenues of the Environmental Services operating segment. Revenues generated from waste oil, anti-freeze and oil filter collection services, sales of bulk blended oil products and sales of bulk automotive fluids contribute to the Safety-Kleen Sustainability Solutions operating segment. Generally, the revenue from services is recognized over time, as the customer receives and consumes the benefits of the services as they are being performed and the Company has a right to payment for performance completed to date. The duration of such services can be over a number of hours or several days. The Company uses the input method to recognize revenue over time, based on time and materials incurred. Product revenue is recognized upon the transfer of control whereby control transfers when the products are delivered to the customer. Containerized waste services consist of profiling, collecting, transporting and recycling or disposing of a wide variety of waste. Related collection and transportation revenues are recognized over time, as the customer receives and consumes the benefits of the services as they are being performed and the Company has a right to payment for performance completed to date. Parts washer services include customer use of the Company's parts washer equipment, cleaning and maintenance of the parts washer equipment and removal and replacement of used cleaning fluids. Parts washer services are considered a single performance obligation due to the highly integrated and interdependent nature of the arrangement. Revenue from parts washer services is recognized over the service interval as the customer receives the benefit of the services. Safety-Kleen Oil—Safety-Kleen Oil related sales contribute to the revenues of the Safety-Kleen Sustainability Solutions segment. These revenues are generated from sales of high-quality base and blended lubricating oils to third-party distributors, government agencies, fleets, railroads and industrial customers. The business also sells recycled fuel oil to asphalt plants, industrial plants and pulp and paper companies. The used oil is also processed into vacuum gas oil which can be further re-refined into lubricant base oils or sold directly into the marine diesel oil fuel market. Revenue for oil products is recognized at a point in time, upon the transfer of control. Control transfers when the products are delivered to the customer.
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REVENUES (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Disaggregation of Revenue | The following tables present the Company's third-party revenue disaggregated by source of revenue and geography (in thousands):
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Schedule of Contract Balances |
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BUSINESS COMBINATIONS (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the preliminary determination and recognition of assets acquired and liabilities assumed (in thousands):
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INVENTORIES AND SUPPLIES (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventories and Supplies | Inventories and supplies consisted of the following (in thousands):
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PROPERTY, PLANT AND EQUIPMENT (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Property, Plant and Equipment | Property, plant and equipment consisted of the following (in thousands):
________________ (1) Balances inclusive of gross right-of-use ("ROU") assets classified as finance leases of $8.0 million in both periods. (2) Balances inclusive of gross ROU assets classified as finance leases of $132.5 million and $106.7 million, respectively. (3) Balances inclusive of gross ROU assets classified as finance leases of $9.2 million in both periods.
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GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Changes to Goodwill | The changes in goodwill by segment for the nine months ended September 30, 2023 were as follows (in thousands):
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Schedule of Finite-Lived Intangible Assets | As of September 30, 2023 and December 31, 2022, the Company's intangible assets consisted of the following (in thousands):
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Summary of Indefinite-Lived Intangible Assets | As of September 30, 2023 and December 31, 2022, the Company's intangible assets consisted of the following (in thousands):
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Schedule of Expected Amortization for the Net Carrying Amount of Finite Lived Intangible Assets | The expected amortization of the net carrying amount of finite-lived intangible assets at September 30, 2023 was as follows (in thousands):
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ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accrued Expenses | Accrued expenses and other current liabilities consisted of the following (in thousands):
|
CLOSURE AND POST-CLOSURE LIABILITIES (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset Retirement Obligation Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Closure and Post-Closure Liabilities | The changes to closure and post-closure liabilities (also referred to as “asset retirement obligations”) from January 1, 2023 through September 30, 2023 were as follows (in thousands):
|
REMEDIAL LIABILITIES (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Environmental Remediation Obligations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Changes to Remedial Liabilities | The changes to remedial liabilities from January 1, 2023 through September 30, 2023 were as follows (in thousands):
|
FINANCING ARRANGEMENTS (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of the Entity's Financial Arrangements | The following table is a summary of the Company’s long-term debt (in thousands):
|
EARNINGS PER SHARE (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Reconciliation of Basic and Diluted Earnings Per Share Computations | The following are computations of basic and diluted earnings per share (in thousands, except per share amounts):
|
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Loss | The changes in accumulated other comprehensive loss by component and related tax impacts for the nine months ended September 30, 2023 were as follows (in thousands):
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Schedule of Reclassification Out of Accumulated Other Comprehensive Loss | The amount realized in the consolidated statement of operations during the three and nine months ended September 30, 2023 which was reclassified out of accumulated other comprehensive loss was as follows (in thousands):
(1) For the nine months ended September 30, 2023, the balance is inclusive of an $8.3 million gain realized in connection with the settlement of the 2018 Swaps. For more information on this transaction, see Note 12, "Financing Arrangements."
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STOCK-BASED COMPENSATION (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restricted Stock Awards | The following table summarizes information about restricted stock awards for the nine months ended September 30, 2023:
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Schedule of Performance Stock Awards | The following table summarizes information about performance stock awards for the nine months ended September 30, 2023:
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SEGMENT REPORTING (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Reconciliation of Third Party Revenues to Direct Revenues | The following tables reconcile third-party revenues to direct revenues for the three and nine months ended September 30, 2023 and 2022 (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Reconciliation to Consolidated Statements of Income to Adjusted EBITDA | The following table presents Adjusted EBITDA information used by management by reported segment (in thousands):
|
SIGNIFICANT ACCOUNTING POLICIES (Details) |
9 Months Ended |
---|---|
Sep. 30, 2023
reporting_unit
segment
| |
Accounting Policies [Abstract] | |
Number of operating segments | segment | 2 |
Number of reporting units | reporting_unit | 3 |
REVENUES - Additional Information (Details) |
9 Months Ended |
---|---|
Sep. 30, 2023
source
| |
Disaggregation of Revenue [Line Items] | |
Deferred contract cost, recognition period | 3 months |
Environmental Services | |
Disaggregation of Revenue [Line Items] | |
Number of revenue sources | 4 |
Safety-Kleen Sustainability Solutions | |
Disaggregation of Revenue [Line Items] | |
Number of revenue sources | 2 |
REVENUES - Contract Balances (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Revenue from Contract with Customer [Abstract] | ||
Receivables | $ 1,010,335 | $ 964,603 |
Contract assets (unbilled receivables) | 130,888 | 107,010 |
Contract liabilities (deferred revenue) | $ 102,468 | $ 94,094 |
DISPOSITION OF BUSINESS (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
Jun. 30, 2022 |
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Gain on sale of business | $ 0 | $ 0 | $ 0 | $ 8,864 | |
Disposed of by Sale | June 30, 2022 Disposition | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Consideration on sale of business | $ 18,800 | ||||
Gain on sale of business | $ 8,900 |
INVENTORIES AND SUPPLIES (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Inventory [Line Items] | ||
Total inventories and supplies | $ 311,512 | $ 324,994 |
Oil and oil related products | ||
Inventory [Line Items] | ||
Total inventories and supplies | 109,345 | 151,519 |
Supplies | ||
Inventory [Line Items] | ||
Total inventories and supplies | 170,512 | 143,743 |
Solvent and solutions | ||
Inventory [Line Items] | ||
Total inventories and supplies | 11,519 | 11,994 |
Other | ||
Inventory [Line Items] | ||
Total inventories and supplies | $ 20,136 | $ 17,738 |
PROPERTY, PLANT AND EQUIPMENT - Additional Information (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense, inclusive of landfill and finance lease amortization | $ 80.4 | $ 75.3 | $ 229.7 | $ 223.0 |
Interest costs capitalized | $ 1.7 | $ 0.9 | $ 4.4 | $ 2.0 |
GOODWILL AND OTHER INTANGIBLE ASSETS - Changes to Goodwill (Details) $ in Thousands |
9 Months Ended |
---|---|
Sep. 30, 2023
USD ($)
| |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | $ 1,246,878 |
Increase from current period acquisition | 39,088 |
Measurement period adjustments from prior period acquisitions | 342 |
Foreign currency translation | 165 |
Goodwill, ending balance | 1,286,473 |
Environmental Services | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 1,071,846 |
Increase from current period acquisition | 39,088 |
Measurement period adjustments from prior period acquisitions | 0 |
Foreign currency translation | 118 |
Goodwill, ending balance | 1,111,052 |
Safety-Kleen Sustainability Solutions | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 175,032 |
Increase from current period acquisition | 0 |
Measurement period adjustments from prior period acquisitions | 342 |
Foreign currency translation | 47 |
Goodwill, ending balance | $ 175,421 |
GOODWILL AND OTHER INTANGIBLE ASSETS - Additional Information (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization of permits and other intangible assets | $ 12.5 | $ 13.1 | $ 37.8 | $ 37.6 |
GOODWILL AND OTHER INTANGIBLE ASSETS - Expected Future Amortization (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2023 (three months) | $ 12,420 | |
2024 | 46,437 | |
2025 | 43,042 | |
2026 | 41,143 | |
2027 | 39,067 | |
Thereafter | 311,331 | |
Finite-lived intangible assets, net | $ 493,440 | $ 498,248 |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Payables and Accruals [Abstract] | ||
Accrued insurance | $ 98,803 | $ 92,909 |
Accrued interest | 14,791 | 20,033 |
Accrued compensation and benefits | 98,108 | 123,226 |
Accrued income, real estate, sales and other taxes | 59,035 | 61,442 |
Accrued other | 98,360 | 99,106 |
Total accrued expenses | $ 369,097 | $ 396,716 |
REMEDIAL LIABILITIES - Additional Information (Details) $ in Millions |
9 Months Ended |
---|---|
Sep. 30, 2023
USD ($)
| |
Remedial Liabilities for Inactive Sites | |
Remedial liabilities | |
Increase of remedial liabilities due to changes in estimates of related liabilities to account for new information obtained | $ 1.1 |
Remedial Liabilities for Active Sites | |
Remedial liabilities | |
Increase of remedial liabilities due to changes in estimates of related liabilities to account for new information obtained | $ 1.1 |
EARNINGS PER SHARE - Reconciliation of Basic and Diluted Earnings Per Share Computations (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Numerator for basic and diluted earnings per share: | ||||
Net income, basic | $ 91,340 | $ 135,799 | $ 279,507 | $ 329,270 |
Net income, diluted | $ 91,340 | $ 135,799 | $ 279,507 | $ 329,270 |
Denominator: | ||||
Weighted-average basic shares outstanding (in shares) | 54,122 | 54,111 | 54,097 | 54,278 |
Dilutive effect of outstanding stock awards (in shares) | 297 | 270 | 314 | 264 |
Dilutive shares outstanding (in shares) | 54,419 | 54,381 | 54,411 | 54,542 |
Basic earnings per share (in dollars per share) | $ 1.69 | $ 2.51 | $ 5.17 | $ 6.07 |
Diluted earnings per share (in dollars per share) | $ 1.68 | $ 2.50 | $ 5.14 | $ 6.04 |
EARNINGS PER SHARE - Anti-Dilutive Securities (Details) - shares |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Number of performance stock awards that performance criteria not attained (in shares) | 103,454 | 81,341 | 103,454 | 81,341 |
Restricted stock awards | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive shares excluded from computation of earning per share (in shares) | 6,550 | 10,043 | 14,050 | 13,500 |
ACCUMULATED OTHER COMPREHENSIVE LOSS - Reclassified Out of Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |
---|---|---|---|
Jan. 24, 2023 |
Sep. 30, 2023 |
Sep. 30, 2023 |
|
Interest Rate Swap | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Unrealized Gain on Fair Value of Interest Rate Hedges | $ 5,000 | $ 25,175 | |
2018 Swaps | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Unrealized Gain on Fair Value of Interest Rate Hedges | $ 8,300 |
STOCK-BASED COMPENSATION - Additional Information (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Share-Based Payment Arrangement [Abstract] | ||||
Stock-based compensation | $ 4.3 | $ 7.8 | $ 14.8 | $ 20.4 |
Income tax benefit | $ 0.7 | $ 1.5 | $ 2.4 | $ 3.8 |
STOCK-BASED COMPENSATION - Restricted Stock Awards (Details) - Restricted stock awards - USD ($) $ / shares in Units, shares in Thousands, $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Number of Shares | ||||
Beginning balance (in shares) | 427,142 | |||
Granted (in shares) | 165,368 | |||
Vested (in shares) | (157,806) | |||
Forfeited (in shares) | (44,056) | |||
Ending balance (in shares) | 390,648 | 390,648 | ||
Weighted Average Grant-Date Fair Value | ||||
Beginning of period (in dollars per share) | $ 84.64 | |||
Granted (in dollars per share) | 137.06 | |||
Vested (in dollars per share) | 74.74 | |||
Forfeited (in dollars per share) | 102.42 | |||
End of period (in dollars per share) | $ 108.83 | $ 108.83 | ||
Unrecognized compensation cost | $ 32.5 | $ 32.5 | ||
Period for recognition (in years) | 3 years | |||
Fair value of share-based payment awards | $ 16.6 | $ 9.1 | $ 24.6 | $ 14.7 |
STOCK-BASED COMPENSATION - Performance Stock Awards (Details) - Performance stock awards - USD ($) $ / shares in Units, shares in Thousands, $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Number of Shares | ||||
Beginning balance (in shares) | 213,679 | |||
Granted (in shares) | 119,382 | |||
Vested (in shares) | (69,268) | |||
Forfeited (in shares) | (35,874) | |||
Ending balance (in shares) | 227,919 | 227,919 | ||
Weighted Average Grant-Date Fair Value | ||||
Beginning of period (in dollars per share) | $ 91.62 | |||
Granted (in dollars per share) | 130.77 | |||
Vested (in dollars per share) | 92.60 | |||
Forfeited (in dollars per share) | 111.03 | |||
End of period (in dollars per share) | $ 108.77 | $ 108.77 | ||
Unrecognized compensation cost | $ 3.7 | $ 3.7 | ||
Fair value of share-based payment awards | $ 1.7 | $ 1.0 | $ 9.6 | $ 4.7 |
SEGMENT REPORTING - Narrative (Details) |
9 Months Ended |
---|---|
Sep. 30, 2023
segment
| |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
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