EX-99.1 2 a10-4524_1ex99d1.htm EX-99.1

Exhibit 99.1

 

Press Release

 

Clean Harbors Reports Fourth-Quarter

and Year-End 2009 Financial Results

 

·                  Year-over-Year Revenue Growth Driven by Eveready Acquisition

·                  Profitability Lower than Expected Due to Utilization Levels of Eveready Assets

·                  Cash Flow Remains Strong; Ends Year with $234 Million in Cash and Equivalents

·                  Company Updates 2010 Guidance

 

Norwell, MA — February 24, 2010 Clean Harbors, Inc. (“Clean Harbors”) (NYSE: CLH), the leading provider of environmental, energy and industrial services throughout North America, today announced financial results for the fourth quarter and year ended December 31, 2009.

 

For the fourth quarter of 2009, Clean Harbors reported a 39 percent increase in revenue to $347.0 million compared with $249.8 million in the fourth quarter of 2008.  This increase was primarily due to the recent acquisition of Eveready Inc., a leading provider of energy and industrial services in Western Canada, which was acquired on July 31.  Income from operations was $27.9 million compared with $26.9 million in the fourth quarter of 2008.  Fourth quarter 2009 net income was $13.9 million, or $0.53 per diluted share, compared with $17.9 million, or $0.75 per diluted share, in the fourth quarter of 2008.

 

EBITDA (see description below) increased 27 percent to $52.6 million in the fourth quarter of 2009 from $41.3 million in the comparable period of 2008.

 

Comments on the Fourth Quarter

 

“Our fourth-quarter results were mixed as we achieved the low end of our quarterly revenue guidance, but generated lower-than-anticipated EBITDA,” said Alan S. McKim, Chairman and Chief Executive Officer.  “The quarter marked our first full reporting period for Clean Harbors with Eveready.  Our nearly 40% top-line growth was driven primarily by the addition of the Eveready business lines.  In Environmental Services — which is primarily the legacy Clean Harbors business — we saw some stabilization as revenues increased by approximately 5% sequentially.   Incineration levels remained healthy at 87% utilization, landfill volumes rebounded from a soft third quarter, and we saw incremental upticks in our Treatment, Storage and Disposal Facilities and wastewater treatment business.  Revenues within Clean Harbors Energy and Industrial Services — primarily the Eveready operations — fell below expectations in several areas, particularly within Exploration Services.”

 

“While our EBITDA was 27% higher year-over-year due to the acquisition and the leverage within our network, several factors led to our EBITDA falling short of our guidance,” said McKim.  “We ramped up our staffing levels at Eveready for the seasonally stronger fourth quarter.  However, customer demand did not materialize as quickly as anticipated, resulting in lower billable utilization of our personnel and underutilization of Eveready’s fleet of specialized equipment.  In addition, margins came under pressure from a highly competitive pricing environment.”

 

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

 



 

Full-Year 2009 Results

 

Revenues for the year ended December 31, 2009 increased 4 percent to a record $1.07 billion, compared with $1.03 billion for full-year 2008.  Income from operations for full-year 2009 was $82.1 million compared with $108.0 million in the prior year.  EBITDA (see description below) for 2009 was $157.6 million compared with $163.2 million for 2008.   EBITDA for 2009 was reduced by $8.1 million in acquisition-related costs.

 

The Company generated net income of $36.7 million, or $1.47 per diluted share, for the full-year 2009.  This compares with 2008 net income of $57.5 million, or $2.51 per diluted share.

 

The Company concluded 2009 with cash and cash equivalents of $233.5 million, compared with $249.5 million at December 31, 2008.

 

Comments on Full-Year 2009

 

“The economic recession clearly hindered our performance in 2009,” McKim said.  “Within our Environmental Services business, Technical Services was met with prolonged project delays and weakness within certain key verticals.  At the same time, Field Services was affected by the slowdown at many of our petrochemical, specialty chemical, utility and refinery customers, as well as limited remediation business.  The year also lacked any major emergency response events.  We concluded the year with a soft quarter in our newly formed Industrial Services and Exploration segments.  Despite these challenges, 2009 was a year of achievement and expansion for Clean Harbors.  We successfully acquired Eveready, broadened our geographic footprint, substantially expanded our service offerings, increased our incineration capacity and solvent recycling capabilities, generated strong free cash flow for the year, and once again were recognized for our exemplary health and safety track record by OSHA.”

 

Non-GAAP Fourth-Quarter and Full-Year 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 as described in the following reconciliation showing the differences between reported net income and EBITDA for the fourth quarter and full year of 2009 and 2008 (in thousands):

 



 

 

 

For the three months ended:

 

For the year ended:

 

 

 

December 31,
2009

 

December 31,
2008

 

December 31,
2009

 

December 31,
2008

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

13,922

 

$

17,949

 

$

36,686

 

$

57,486

 

Accretion of environmental liabilities

 

2,689

 

2,698

 

10,617

 

10,776

 

Depreciation and amortization

 

21,947

 

11,776

 

64,898

 

44,471

 

Loss on early extinguishment of debt

 

 

1,222

 

4,853

 

5,473

 

Interest expense, net

 

6,454

 

614

 

15,999

 

8,403

 

Provision for income taxes

 

8,678

 

7,110

 

26,225

 

36,491

 

Income from discontinued operations, net of tax

 

(1,027

)

 

(1,439

)

 

Other (income) expense

 

(104

)

(30

)

(259

)

119

 

EBITDA

 

$

52,559

 

$

41,339

 

$

157,580

 

$

163,219

 

 

Business Outlook and Financial Guidance

 

“We remain cautious about the sales environment in 2010 although we are beginning to see the initial signs of recovery in many of our end-markets — characterized by two consecutive quarters of sequential revenue gains in our Environmental Services business,” McKim said.  “In early 2010, we experienced an uptick in much of our Western Canadian operations, although not at the profitability levels we expected.”

 

“The Company continues with the integration of Eveready and expects that the management systems and processes that have been implemented will enable us to improve our EBITDA margins throughout 2010.  Going forward, our focus will be on effectively managing our personnel and asset utilization levels, opening new offices across Eastern Canada and the U.S., and cross selling the many services the Company now offers across our expanded customer base. We continue to believe the Eveready platform will enable us to achieve continued revenue growth for the foreseeable future in the U.S., Canada and internationally,” McKim concluded.

 

The Company is reiterating its 2010 annual revenue guidance, exclusive of potential future acquisitions, in the range of $1.40 billion to $1.45 billion.  The Company now is targeting EBITDA of $224 million to $232 million, or EBITDA margin of approximately 16% for 2010.  The Company had previously provided preliminary EBITDA margin guidance of approximately 17%. This reduction in EBITDA guidance is primarily due to the recent margin trends in the Eveready business and the unseasonable weather throughout North America in early 2010.

 



 

Conference Call Information

 

Clean Harbors will conduct a conference call for investors to discuss the information contained in this press release today, Wednesday, February 24, 2010 at 9:00 a.m. (ET).  On the call, Chairman, President and Chief Executive Officer Alan S. McKim and Executive Vice President and Chief Financial Officer James M. Rutledge will discuss Clean Harbors’ financial results, business outlook and growth strategy.

 

Investors who wish to listen to the fourth-quarter and year-end webcast should log onto www.cleanharbors.com/investor_relations.  The live call also can be accessed by dialing 877.709.8155 or 201.689.8881 prior to the start of the call.  If you are unable to listen to the live call, the webcast will be archived on the Company’s website.

 

About Clean Harbors

 

Clean Harbors is the leading provider of environmental, energy and industrial services throughout North America.  The Company serves more than 50,000 customers, including a majority of the Fortune 500 companies, thousands of smaller private entities and numerous federal, state, provincial and local governmental agencies.

 

Within Clean Harbors Environmental Services, the Company offers Technical Services and Field Services.  Technical Services provide a broad range of hazardous material management and disposal services including the collection, packaging, recycling, treatment and disposal of hazardous and non-hazardous waste.  Field Services provide a wide variety of environmental cleanup services on customer sites or other locations on a scheduled or emergency response basis.

 

Within Clean Harbors Energy and Industrial Services, the Company offers Industrial Services and Exploration Services.  Industrial Services provide industrial and specialty services, such as high-pressure and chemical cleaning, catalyst handling, decoking, material processing and industrial lodging services to refineries, chemical plants, pulp and paper mills, and other industrial facilities.  Exploration Services provide exploration and directional boring services to the energy sector serving oil and gas exploration, production, and power generation.

 

Headquartered in Norwell, Massachusetts, Clean Harbors has more than 175 locations, including over 50 waste management facilities, throughout North America in 36 U.S. states, seven Canadian provinces, Mexico and Puerto Rico.  The Company also operates international locations in Bulgaria, China, Sweden, Singapore, Thailand and the United Kingdom.  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.  Such statements may include, but are not limited to, statements about the benefits of the acquisition of Eveready, including future financial and operating results, the combined company’s plans, objectives, expectations and intentions and other statements that are not historical facts.  Such statements are based upon the current beliefs and expectations of Clean Harbors’ management and are subject to significant risks and uncertainties.  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.  A variety of factors may affect the Company’s performance, including, but not limited to:

 

·                  The Company’s ability to manage the significant environmental liabilities that it assumed in connection with prior acquisitions;

·                  The availability and costs of liability insurance and financial assurance required by governmental entities related to the Company’s facilities;

·                  General conditions in the oil and gas industries, particularly in the Alberta oil sands and other parts of Western Canada;

·                  The possibility that the expected synergies from the acquisition of Eveready will not be timely or fully realized;

·                  The extent to which the Company’s major customers commit to and schedule major projects;

·                  The Company’s future cash flow and earnings;

·                  The Company’s ability to meet its debt obligations;

·                  The Company’s ability to increase its market share;

·                  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, energy and industrial services marketplaces; 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 www.cleanharbors.com/investor_relations.

 

Contacts:

 

James M. Rutledge

 

Bill Geary

 

Jim Buckley

EVP and Chief Financial Officer

 

Public Affairs Counsel

 

Executive Vice President

Clean Harbors, Inc.

 

Clean Harbors, Inc.

 

Sharon Merrill Associates, Inc.

781.792.5100

 

781.792.5130

 

617.542.5300

InvestorRelations@cleanharbors.com

 

 

 

clh@investorrelations.com

 



 

CLEAN HARBORS, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

(in thousands except per share amounts)

 

 

 

For the three months ended:

 

For the year ended:

 

 

 

December 31,

 

December 31,

 

December 31,

 

December 31,

 

 

 

2009

 

2008

 

2009

 

2008

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

346,969

 

$

249,788

 

$

1,074,220

 

$

1,030,713

 

Cost of revenues (exclusive of items shown separately below)

 

252,816

 

172,179

 

753,483

 

707,820

 

Selling, general and administrative expenses

 

41,594

 

36,270

 

163,157

 

159,674

 

Accretion of environmental liabilities

 

2,689

 

2,698

 

10,617

 

10,776

 

Depreciation and amortization

 

21,947

 

11,776

 

64,898

 

44,471

 

Income from operations

 

27,923

 

26,865

 

82,065

 

107,972

 

Other income (expense)

 

104

 

30

 

259

 

(119

)

Loss on early extinguishment of debt

 

 

(1,222

)

(4,853

)

(5,473

)

Interest expense, net

 

(6,454

)

(614

)

(15,999

)

(8,403

)

Income from continuing operations before provision for income taxes

 

21,573

 

25,059

 

61,472

 

93,977

 

Provision for income taxes

 

8,678

 

7,110

 

26,225

 

36,491

 

Income from continuing operations, net of tax

 

12,895

 

17,949

 

35,247

 

57,486

 

Income from discontinued operations, net of tax

 

1,027

 

 

1,439

 

 

Net income

 

$

13,922

 

$

17,949

 

$

36,686

 

$

57,486

 

Earnings per share:

 

 

 

 

 

 

 

 

 

Basic

 

$

0.53

 

$

0.76

 

$

1.48

 

$

2.56

 

Diluted

 

$

0.53

 

$

0.75

 

$

1.47

 

$

2.51

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

26,244

 

23,697

 

24,817

 

22,465

 

Weighted average common shares outstanding plus potentially dilutive common shares

 

26,363

 

23,871

 

24,933

 

22,866

 

 



 

CLEAN HARBORS, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

ASSETS

(in thousands)

 

 

 

December 31,

 

December 31,

 

 

 

2009

 

2008

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

233,546

 

$

249,524

 

Marketable securities

 

2,072

 

175

 

Accounts receivable, net

 

274,918

 

174,990

 

Unbilled accounts receivable

 

12,331

 

5,545

 

Deferred costs

 

5,192

 

5,877

 

Prepaid expenses and other current assets

 

18,348

 

13,472

 

Supplies inventories

 

41,417

 

26,905

 

Deferred tax assets

 

18,865

 

12,564

 

Assets held for sale

 

13,561

 

 

Total current assets

 

620,250

 

489,052

 

 

 

 

 

 

 

Property, plant and equipment, net

 

589,944

 

295,461

 

 

 

 

 

 

 

Other assets:

 

 

 

 

 

Long-term investments

 

6,503

 

6,237

 

Deferred financing costs

 

10,156

 

3,044

 

Goodwill

 

56,085

 

24,578

 

Permits and other intangibles, net

 

114,188

 

71,754

 

Deferred tax assets

 

 

5,454

 

Other

 

3,942

 

2,756

 

Total other assets

 

190,874

 

113,823

 

Total assets

 

$

1,401,068

 

$

898,336

 

 



 

CLEAN HARBORS, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

LIABILITIES AND STOCKHOLDERS’ EQUITY

(in thousands)

 

 

 

December 31,

 

December 31,

 

 

 

2009

 

2008

 

Current liabilities:

 

 

 

 

 

Current portion of capital lease obligations

 

$

1,923

 

$

400

 

Accounts payable

 

97,923

 

71,618

 

Deferred revenue

 

21,156

 

24,190

 

Accrued expenses

 

90,707

 

67,901

 

Current portion of closure, post-closure and remedial liabilities

 

18,412

 

17,264

 

Liabilities held for sale

 

3,199

 

 

Total current liabilities

 

233,320

 

181,373

 

Other liabilities:

 

 

 

 

 

Closure and post-closure liabilities, less current portion

 

28,505

 

26,254

 

Remedial liabilities, less current portion

 

134,379

 

135,007

 

Long-term obligations

 

292,433

 

52,870

 

Capital lease obligations, less current portion

 

6,915

 

360

 

Unrecognized tax benefits and other long-term liabilities

 

91,691

 

73,427

 

Total other liabilities

 

553,923

 

287,918

 

Total stockholders’ equity, net

 

613,825

 

429,045

 

Total liabilities and stockholders’ equity

 

$

1,401,068

 

$

898,336