EX-99.1 2 a06-17609_1ex99d1.htm EX-99

Exhibit 99.1

 

Press Release

 

Clean Harbors Announces Record Revenue and Profitability for the Second Quarter 2006

 

Company Exceeds Revenue and EBITDA Guidance

Norwell, MA – August 8, 2006 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 second quarter and six months ended June 30, 2006.

For the second quarter of 2006, Clean Harbors reported a $25.7 million increase in revenue to $199.6 million, up 15 percent from $173.9 million reported in the second quarter of 2005.  Income from operations rose 24% to $17.8 million from $14.4 million in the second quarter of 2005.  Net income attributable to common stockholders was $11.3 million, or $0.55 per diluted share, for the second quarter of 2006.  This compares with $7.3 million, or $0.43 per diluted share, in the same period of 2005.

EBITDA (see description below) increased 17 percent to $28.3 million in the second quarter of 2006, from $24.2 million for the quarter ended June 30, 2005.

Comments on the Second Quarter

“Clean Harbors delivered a record-setting performance in the second quarter,” stated Alan S. McKim, Chairman and Chief Executive Officer.  “We surpassed our revenue and EBITDA guidance through a combination of targeted growth initiatives and a continued focus on cost containment.  Our top-line grew by 15% year-over-year as a result of steady execution in both our Technical Services and Site Services businesses.  We increased our EBITDA margin to 14.2 percent in the quarter despite one-time expenses related to the move of our corporate headquarters to Norwell and costs associated with the proposed acquisition of Teris L.L.C.”

“Within Technical Services, our ability to win large-scale facility projects drove substantial volumes to our disposal facilities,” McKim said. “Utilization at our incineration facilities, which includes the expansion we recently implemented at our Deer Park location, was greater than 90 percent.  Our momentum in the quarter was even more evident in our landfill business, where volumes increased more than 75% from the same period in 2005.”

“Site Services also was a key contributor in the quarter,”  McKim said.  “Along with a steady performance from our branch office locations, we secured approximately $3 million from several small-scale emergency response projects, and $800,000 from residual emergency response work related to the Gulf Coast hurricanes.”

 

42 Longwater Drive · PO Box 9149 · Norwell, Massachusetts 02061-9149 · 800.282.0058 · www.cleanharbors.com




Non-GAAP Second-Quarter Results

Clean Harbors reports EBITDA results, which are non-GAAP financial measures, as a complement to results provided in accordance with accounting principles generally accepted in the United States (GAAP) and believes that such information provides additional useful information to investors since the Company’s loan covenants are based upon levels of EBITDA achieved.  The Company defines EBITDA in accordance with its existing credit agreement, as described in the following reconciliation showing the differences between reported net income and EBITDA for the second quarter and first six months of 2006 and 2005 (in thousands):

 

For the three months
ended:

 

For the six months
ended:

 

 

 

June 30,
2006

 

June 30,
2005

 

June 30,
2006

 

June 30,
2005

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

11,372

 

$

7,371

 

$

14,777

 

$

12,212

 

Accretion of environmental liabilities

 

2,543

 

2,616

 

5,053

 

5,250

 

Depreciation and amortization

 

7,954

 

7,145

 

15,233

 

14,354

 

Loss on early extinguishment of debt

 

 

 

8,290

 

 

Interest expense, net

 

2,876

 

5,946

 

6,049

 

11,907

 

Provision for income taxes

 

3,469

 

981

 

4,164

 

1,013

 

Other (income) expense

 

132

 

109

 

162

 

(510

)

EBITDA

 

$

28,346

 

$

24,168

 

$

53,128

 

$

44,226

 

 

Business Outlook and Financial Guidance

“We enter the second half of 2006 with significant momentum in several areas of our business,” McKim said.  “We have a healthy pipeline of large-scale projects to feed our disposal facilities.  Within Site Services, the strength of the Clean Harbors’ brand continues to grow based on our responsiveness, reliability and extensive  portfolio of service offerings.  We expect to add two branch locations in the third quarter to support our organic growth.  On the cost side, we will continue to pursue our ongoing cost-reduction initiatives, including our focus on internalizing transportation and utilizing our rail assets.”

Based on its second-quarter results and current market conditions, the Company expects revenues for the third quarter of 2006 to be in a range of $190 million to $195 million, and EBITDA to be in the range of $28 million to $30 million.  This guidance does not include any contribution from the proposed Teris acquisition.




Teris Acquisition

In early May, Clean Harbors announced it had signed a definitive agreement to acquire Teris L.L.C., an environmental services company based in Dallas, Texas with an incinerator in El Dorado, Arkansas and a transportation, storage and disposal facility in Wilmington, California.  Under the terms of the agreement, Clean Harbors will acquire all of the membership interests in Teris for approximately $52.7 million in cash from SITA U.S.A., Inc., a subsidiary of Suez Environnement, S.A., a French corporation.  Clean Harbors plans to fund the purchase price from existing cash and a term loan under its existing credit agreement.  The acquisition is subject to customary closing conditions, and Clean Harbors currently expects the acquisition to close during the third quarter.

“Following the closing of the transaction, we will immediately begin the integration process, which we expect to complete by year-end,” concluded McKim. “We are excited about this acquisition as Teris’ operations are an ideal complement to our existing network of disposal facilities.”

Conference Call Information

 

Clean Harbors will conduct a conference call for investors to discuss the information contained in this news release today, Tuesday, August 8 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.

Those who wish to listen to the second-quarter conference call webcast should visit the Investor Relations section of the Company’s website at www.cleanharbors.com.  The live call also can be accessed by dialing (800) 289-0494 or (913) 981-5520 (confirmation code: 8892444) prior to the start of the call.  If you are unable to listen to the live call, the webcast will be archived on the Company’s website.

About Clean Harbors, 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 more than 45,000 customers, comprising more than 175 Fortune 500 companies, thousands of smaller private entities and numerous governmental agencies.  Headquartered in Norwell, 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 other than through its various filings with the Securities and Exchange Commission.  Furthermore, all financial information in this press release is based on preliminary data and is subject to the final closing of the Company’s books and records.

A variety of factors beyond the control of the Company may affect the Company’s performance, including, but not limited to:

·                  The Company’s ability to close its announced acquisition of Teris in a timely fashion, if at all, and successfully integrate its operations and assets into its existing network of services and disposal facilities;

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

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

·                  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;

·                  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; and




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

 

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, which may be viewed on the Investor portal of the Company’s Web Page at www.cleanharbors.com.

Contact:

 

James M. Rutledge

 

Bill Geary

Executive Vice President and Chief Financial Officer

 

Executive Vice President and General Counsel

Clean Harbors, Inc.

 

Clean Harbors, Inc.

781-792-5100

 

781-792-5130

InvestorRelations@cleanharbors.com

 

 

 

Jim Buckley
Executive Vice President
Sharon Merrill Associates, Inc.

617-542-5300

clhb@investorrelations.com




CLEAN HARBORS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

Unaudited

(in thousands except per share amounts)

 

 

 

For the three months ended:

 

For the six months ended:

 

 

 

June 30,

 

June 30,

 

June 30,

 

June 30,

 

 

 

2006

 

2005

 

2006

 

2005

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

199,562

 

$

173,910

 

$

384,057

 

$

338,876

 

Cost of revenues

 

135,964

 

124,434

 

267,322

 

244,981

 

Selling, general and administrative expenses

 

35,252

 

25,308

 

63,607

 

49,669

 

Accretion of environmental liabilities

 

2,543

 

2,616

 

5,053

 

5,250

 

Depreciation and amortization

 

7,954

 

7,145

 

15,233

 

14,354

 

Income from operations

 

17,849

 

14,407

 

32,842

 

24,622

 

Other income (expense)

 

(132

)

(109

)

(162

)

510

 

Loss on early extinguishment of debt

 

 

 

 

 

(8,290

)

 

 

Interest (expense), net

 

(2,876

)

(5,946

)

(6,049

)

(11,907

)

Income before provision for income taxes

 

14,841

 

8,352

 

18,341

 

13,225

 

Provision for income taxes

 

3,469

 

981

 

4,164

 

1,013

 

Net income

 

11,372

 

7,371

 

14,177

 

12,212

 

Redemption of Series C Preferred Stock, dividends on Series B and C Preferred Stocks and accretion on Series C Preferred Stock

 

69

 

70

 

138

 

140

 

Net income attributable to common stockholders

 

$

11,303

 

$

7,301

 

$

14,039

 

$

12,072

 

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

 

 

Basic income attributable to common stockholders

 

$

0.58

 

$

0.48

 

$

0.72

 

$

0.81

 

Diluted income attributable to common stockholders

 

$

0.55

 

$

0.43

 

$

0.69

 

$

0.71

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

19,495

 

15,213

 

19,441

 

14,913

 

Weighted average common shares outstanding plus potentially dilutive common shares

 

20,549

 

17,253

 

20,518

 

17,142

 

 




CLEAN HARBORS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
ASSETS
(in thousands)

 

 

 

(Unaudited)

 

 

 

 

 

June 30,

 

December 31,

 

 

 

2006

 

2005

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

79,918

 

$

132,449

 

Restricted cash

 

 

3,469

 

Marketable securities

 

11,750

 

 

Accounts receivable, net

 

145,197

 

147,659

 

Unbilled accounts receivable

 

9,649

 

7,049

 

Deferred costs

 

5,267

 

4,937

 

Prepaid expenses and other current assets

 

8,975

 

6,411

 

Supplies inventories

 

12,585

 

12,723

 

Deferred tax assets

 

229

 

219

 

Income tax receivable

 

673

 

1,462

 

Properties held for sale

 

8,236

 

7,670

 

Total current assets

 

282,479

 

324,048

 

 

 

 

 

 

 

Property, plant and equipment, net

 

188,884

 

178,524

 

 

 

 

 

 

 

Other assets:

 

 

 

 

 

Deferred financing costs

 

7,098

 

9,508

 

Goodwill

 

19,032

 

19,032

 

Permits and other intangibles, net

 

76,970

 

77,803

 

Deferred tax assets

 

794

 

1,715

 

Other

 

3,022

 

3,734

 

 

 

106,916

 

111,792

 

Total assets

 

$

578,279

 

$

614,364

 

 




CLEAN HARBORS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS’EQUITY
(in thousands)

 

 

 

(Unaudited)

 

 

 

 

 

June 30,

 

December 31,

 

 

 

2006

 

2005

 

Current liabilities:

 

 

 

 

 

Uncashed checks

 

$

3,219

 

$

7,982

 

Current portion of long-term debt

 

 

52,500

 

Current portion of capital lease obligations

 

1,733

 

1,893

 

Accounts payable

 

74,295

 

71,372

 

Accrued disposal costs

 

2,990

 

3,109

 

Deferred revenue

 

23,226

 

21,784

 

Other accrued expenses

 

44,854

 

49,779

 

Current portion of closure, post-closure and remedial liabilities

 

14,266

 

10,817

 

Income taxes payable

 

3,447

 

4,458

 

Total current liabilities

 

168,030

 

223,694

 

Other liabilities:

 

 

 

 

 

Closure and post-closure liabilities, less current portion

 

21,019

 

20,728

 

Remedial liabilities, less current portion

 

136,840

 

139,144

 

Long-term obligations, less current maturities

 

96,432

 

95,790

 

Capital lease obligations, less current portion

 

3,234

 

4,108

 

Other long-term liabilities

 

15,628

 

14,417

 

Accrued pension cost

 

685

 

825

 

Total other liabilities

 

273,838

 

275,012

 

Total stockholders equity, net

 

136,411

 

115,658

 

Total liabilities and stockholders equity

 

$

578,279

 

$

614,364