EX-99.1 2 a05-7507_1ex99d1.htm EX-99.1

Exhibit 99.1

 

Press Release

 

Clean Harbors Announces First-Quarter 2005 Financial Results

 

Company Exceeds Financial Guidance; Delivers 16 Percent Revenue Growth
and 149 Percent Growth in Income from Operations

 

Braintree, MA – April 28, 2005 Clean Harbors, Inc. (“Clean Harbors”) (NASDAQ: CLHB), the leading provider of environmental and hazardous waste management services throughout North America, today announced financial results for the first quarter ended March 31, 2005.

 

Clean Harbors increased first-quarter 2005 revenues to $165.0 million from $142.8 million in the first quarter of 2004.  Income from operations for the first quarter of 2005 totaled $10.2 million, a 149 percent increase from $4.1 million for the first quarter of 2004.  The Company generated net income of $4.8 million, or $0.27 per diluted share, for the first quarter of 2005.  In the first quarter of 2004, the Company generated net income of $2.8 million, or $0.14 per basic share, which included a non-cash gain of $5.3 million associated with the embedded derivative on the Company’s preferred stock.  Diluted loss for the first quarter of 2004 was $(0.08) per share after adjusting for the non-cash gain.  Clean Harbors’ Series C Preferred Stock was redeemed in June 2004, eliminating its bottom-line effect for future quarters.

 

EBITDA (see description below) increased by 69 percent to $20.1 million in the first quarter of 2005 from $11.9 million (as restated) in the same period a year earlier.  EBITDA for the first quarter of 2005 benefited from the elimination of $1.9 million in legal reserves associated with an environmental matter that the Company determined is no longer probable.

 

Comments on the First Quarter

 

“The demand environment remained strong and Clean Harbors executed on plan once again as we exceeded our financial guidance for the first quarter of 2005,” stated Alan S. McKim, Chairman and Chief Executive Officer.  “While inclement weather conditions affected our utilization rates, Clean Harbors still generated 16 percent revenue growth year-over-year.  Our Site Services business was particularly robust due to emergency response projects that we undertook in the first quarter and base business wins.  Our Transportation & Disposal business also showed continued improvement in the quarter.  In addition, our vertical market approach drove steady volumes to our landfills and incinerators throughout the quarter, which more than offset our limited number of large facilities projects.”

 

“We also continued to make significant headway with our expense management initiatives, which contributed to our achievement of improved operating income and a substantial increase in EDITDA for the quarter,” McKim said. “In particular, we are beginning to benefit from the investments we have been making in internalizing transportation.  Our spending on outsourced transportation costs declined by more than $2 million in the quarter, despite higher business volumes, as we continue to hire additional drivers, purchase more tractors and better utilize our rail assets.”

 

 

1501 Washington Street PO Box 859048 Braintree, Massachusetts 02185-9048 800.282.0058 www.cleanharbors.com

 



 

Non-GAAP First-Quarter Results

 

Clean Harbors reports EBITDA results, which are non-GAAP, as a complement to results provided in accordance with accounting principles generally accepted in the United States (GAAP) and believes that such information provides an additional measurement of the Company’s performance.  The Company defines EBITDA in accordance with its outstanding credit agreement, as described in the following reconciliation showing the differences between reported income and EBITDA for 2005 and 2004 (in thousands):

 

 

 

For the three months ended:

 

 

 

March 31,
2005

 

March 31,
2004

 

 

 

 

 

(Restated)

 

Net income

 

4,841

 

2,817

 

Accretion of environmental liabilities

 

2,634

 

2,588

 

Depreciation and amortization

 

7,209

 

5,405

 

Interest expense, net

 

5,961

 

5,358

 

Provision for income taxes

 

32

 

1,212

 

Other income

 

(588

)

 

Gain on sale of fixed assets

 

(31

)

(244

)

Non-recurring severance charges

 

 

16

 

Change in value of embedded derivative

 

 

(5,287

)

EBITDA

 

20,058

 

11,865

 

 

Business Outlook & Financial Guidance

 

“We have built a solid foundation for profitable growth at Clean Harbors,” said McKim. “As North America’s leader in hazardous waste management, our offerings are increasingly in demand and we have developed a healthy pipeline of potential business.  Going forward, we will focus on securing more large facilities projects, which deliver considerable volumes to our network of disposal facilities.  In addition, we will seek to extend our momentum in Site Services, including pursuing selective acquisitions.”

 

“On the expense side, we remain committed to our goal of significant cost reduction.  We also will continue to invest in systems and technology that will increase our operational efficiency, such as the WIN software platform we are installing throughout our Canadian locations over the next six months,” concluded McKim.

 

For the second quarter of 2005, the Company expects to grow revenue by 5 to 6 percent year over year and generate EBITDA in the range of $21.5 million to $23.5 million.

 



 

Conference Call Information

 

Clean Harbors will conduct a conference call for investors to discuss the information contained in this news release today, April 28 at 9:00 a.m. (ET).  Investors who want to hear a webcast of the call should log onto www.cleanharbors.com and select “Investor Relations.”  In addition, if you are unable to listen to the live webcast, the call will be archived on the investor section of the website.

 

About Clean Harbors, Inc.

 

Clean Harbors, Inc. is North America’s leading provider of environmental and hazardous waste management services.  With an unmatched infrastructure of 48 waste management facilities, including nine landfills, five incineration locations and seven wastewater treatment centers, the Company provides essential services to over 45,000 customers, including more than 175 Fortune 500 companies, thousands of smaller private entities and numerous federal, state and local governmental agencies.  Headquartered in Braintree, Massachusetts, Clean Harbors has more than 100 locations strategically positioned throughout North America in 36 U.S. states, six Canadian provinces, Mexico and Puerto Rico.  For more information, visit www.cleanharbors.com.

 

Safe Harbor Statement

 

Any statements contained herein that are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, and involve risks and uncertainties.  These forward-looking statements are generally identifiable by use of the words “believes,” “expects,” “intends,” “anticipates,” “plans to,” “estimates,” “projects,” or similar expressions.  These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those reflected in these forward-looking statements.  Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management’s opinions only as of the date hereof.  The Company undertakes no obligation to revise or publicly release the results of any revision to these forward-looking statements. Furthermore, all financial information in this press release is unaudited, and may change materially upon completion of the audit of the Company’s financial statements. A variety of factors beyond the control of the Company affect the Company’s performance, including, but not limited to:

 

                  The effects of general economic conditions in the United States, Canada and other territories and countries where the Company does business;

 

                  The effect of economic forces and competition in specific marketplaces where the Company competes;

 

                  The possible impact of new regulations or laws pertaining to all activities of the Company’s operations;

 

                  The outcome of litigation or threatened litigation or regulatory actions;

 

                  The effect of commodity pricing on overall revenues and profitability;

 

                  The possibility that the Sarbanes-Oxley 404 review process will reveal material weaknesses in the

 



 

Company’s financial controls.

 

                  Possible fluctuations in quarterly or annual results or adverse impacts on the Company’s results caused by the adoption of new accounting standards or interpretations or regulatory rules and regulations;

 

                  The effect of weather conditions or other aspects of the forces of nature on field or facility operations;

 

                  The effects of industry trends in the environmental services and waste handling marketplace;

 

                  The effects of conditions in the financial services industry on the availability of capital and financing;

 

                  The Company’s ability to manage the significant environmental liabilities which it assumed in connection with the CSD acquisition; and

 

                  The availability and costs of liability insurance and financial assurance required by governmental entities relating to our facilities.

 

Any of the above factors and numerous others not listed nor foreseen may adversely impact the Company’s financial performance.  Additional information on the potential factors that could affect the Company’s actual results of operations is included in its filings with the Securities and Exchange Commission, including but not limited to its Annual Report on Form 10-K, in its entirety and specifically Factors That May Affect Future Results under Item 7, for the fiscal year ended December 31, 2004, which was filed with the SEC on March 31, 2005 and Form 10-Q for the quarter ended March 31, 2005, which the Company plans to file on May 10, 2005.

 

Contact:

Jason Fredette

Associate Vice President

Sharon Merrill Associates

(617) 542-5300

jfredette@investorrelations.com

 



 

CLEAN HARBORS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

Unaudited

(in thousands except per share amounts)

 

 

 

Three Months Ended
March 31,

 

 

 

2005

 

2004

 

Revenues

 

$

164,966

 

$

142,757

 

Cost of revenues

 

120,547

 

107,460

 

Selling, general and administrative expenses

 

24,361

 

23,204

 

Accretion of environmental liabilities

 

2,634

 

2,588

 

Depreciation and amortization

 

7,209

 

5,405

 

Income from operations

 

10,215

 

4,100

 

Other income

 

619

 

5,287

 

Interest (expense), net

 

(5,961

)

(5,358

)

Income before provision for income taxes

 

4,873

 

4,029

 

Provision for income taxes

 

32

 

1,212

 

Net income

 

4,841

 

2,817

 

Dividends and accretion on Series B and C Preferred Stocks and accretion on Series C Preferred Stock

 

70

 

855

 

Net income attributable to common shareholders

 

$

4,771

 

$

1,962

 

Earnings (loss) per share:

 

 

 

 

 

Basic earnings attributable to common shareholders

 

$

0.33

 

$

0.14

 

Diluted earnings (loss) attributable to common shareholders

 

$

0.27

 

$

(0.08

)

Weighted average common shares outstanding

 

14,602

 

13,960

 

Weighted average common shares outstanding plus potentially dilutive common shares

 

18,072

 

16,392

 

 



 

CLEAN HARBORS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

 

ASSETS

(in thousands)

 

 

 

(Unaudited)
March 31,
2005

 

December 31,
2004

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

46,034

 

$

31,081

 

Marketable securities

 

 

16,800

 

Accounts receivable, net

 

119,574

 

120,886

 

Unbilled accounts receivable

 

7,824

 

5,377

 

Deferred costs

 

4,361

 

4,923

 

Prepaid expenses

 

14,126

 

13,407

 

Supplies inventories

 

10,752

 

10,318

 

Deferred tax asset

 

187

 

188

 

Properties held for sale

 

8,554

 

8,849

 

Total current assets

 

211,412

 

211,829

 

 

 

 

 

 

 

Property, plant and equipment, net

 

179,291

 

180,526

 

 

 

 

 

 

 

Other assets:

 

 

 

 

 

Deferred financing costs

 

8,668

 

8,950

 

Goodwill

 

19,032

 

19,032

 

Permits and other intangibles, net

 

79,678

 

80,463

 

Deferred tax asset

 

486

 

488

 

Other

 

3,629

 

3,414

 

 

 

111,493

 

112,347

 

Total assets

 

$

502,196

 

$

504,702

 

 



 

CLEAN HARBORS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

LIABILITIES AND STOCKHOLDERS’ EQUITY

(dollars in thousands)

 

 

 

(Unaudited)
March 31,
2005

 

December 31,
2004

 

Current liabilities:

 

 

 

 

 

Uncashed checks

 

$

5,592

 

$

6,542

 

Current portion of capital lease obligations

 

1,622

 

1,522

 

Accounts payable

 

70,714

 

70,363

 

Accrued disposal costs

 

3,091

 

3,032

 

Deferred revenue

 

19,535

 

22,060

 

Other accrued expenses

 

39,987

 

41,054

 

Current portion of closure, post-closure and remedial liabilities

 

15,340

 

14,258

 

Income taxes payable

 

511

 

2,302

 

Total current liabilities

 

156,392

 

161,133

 

Other liabilities:

 

 

 

 

 

Closure and post-closure liabilities, less current portion

 

23,275

 

22,721

 

Remedial liabilities, less current portion

 

139,654

 

144,289

 

Long-term obligations, less current maturities

 

148,163

 

148,122

 

Capital lease obligations, less current portion

 

3,973

 

3,485

 

Other long-term liabilities

 

13,232

 

13,298

 

Accrued pension cost

 

597

 

616

 

Total other liabilities

 

328,894

 

332,531

 

Total stockholders’ equity, net

 

16,910

 

11,038

 

Total liabilities and stockholders’ equity

 

$

502,196

 

$

504,702