EX-99.1 2 dex991.htm PRESS RELEASE PRESS RELEASE

Exhibit 99.1

Press Release

 

Clean Harbors Announces Second Quarter 2004 Financial Results

 

Company Exceeds Revenue and EBITDA Guidance;

EBITDA Nearly Doubles to $19.4 Million and Operating Income Increases to $9.4 Million

 

Braintree, MA – July 28, 2004 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 ended June 30, 2004.

 

Clean Harbors reported second-quarter 2004 revenues of $161.6 million, compared with $172.0 million in the second quarter of 2003. Second-quarter 2003 included one-time revenues of $19.2 million associated with the clean-up of a major oil spill on Cape Cod, Massachusetts. Income from operations in the second quarter of 2004 totaled $9.4 million compared with $0.3 million in the second quarter of 2003. The Company generated a second-quarter 2004 net loss of $(12.1) million, or $(1.63) per share, compared with a net loss of $(6.8) million, or $(0.57) per share a year ago. The net loss in the second quarter of 2004 includes a non-recurring charge of $6.9 million associated with the embedded derivative on the Company’s Series C preferred stock, $7.1 million of net direct refinancing expenses and $1.1 million in other one-time costs associated with the refinancing of the Company’s capital structure on June 30, 2004.

 

Revenues for the six months ended June 30, 2004, were $304.4 million, compared with $314.3 million for the comparable period a year ago. Net loss for the first six months of 2004 was $(9.3) million, or $(1.49) per share, compared with a net loss of $(14.0) million, or $(1.17) per share, for the same period a year earlier.

 

In conjunction with the debt refinancing on June 30, 2004, the Company used a portion of the proceeds from the offering to redeem all outstanding shares of the Series C preferred stock. Beginning with the third quarter of 2004, Clean Harbors will no longer record a non-cash adjustment to the Company’s quarterly financial results based on the embedded derivative.

 

EBITDA nearly doubled to $19.4 million in the second quarter of 2004, compared with $9.8 million in the same period a year earlier. (Note: See disclosures regarding non-GAAP financial results below).

 

Financial Review

 

“Clean Harbors surpassed second-quarter revenue and EBITDA guidance through a combination of targeted growth initiatives and continued focus on reducing costs,” said Alan S. McKim, chairman and chief executive officer. “The quarter was characterized by strong seasonal demand for our broad range of environmental services, and we benefited from both an improving economy and solid execution on our business development plans. By concentrating our sales and marketing efforts on increasing the number and size of large facilities projects, we were able to drive additional volumes to our landfills. Also, by targeting specific vertical markets where we have identified promising growth opportunities, we won a number of new customers and gained market share in the quarter.”

 

 

LOGO

ENVIRONMENTAL SERVICES, INC.

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


Press Release

 

Clean Harbors Announces Second Quarter 2004 Financial Results

 

“During the second quarter, we completed one of our 2004 goals by refinancing the Company’s debt structure,” said McKim. “This new structure is made up of three components: $150 million in secured notes, a $30 million undrawn revolving credit facility and a $90 million synthetic letter of credit facility. The refinancing strengthens Clean Harbors’ balance sheet with approximately $20 million of cash, providing us with the liquidity and flexibility to focus on long-term financial and strategic objectives. We expect to leverage the benefits of this transaction as a catalyst for additional revenue growth and an improved bottom-line performance.”

 

“As evidenced by our strong growth in EBITDA and operating income during the quarter, we continue to recognize benefits from the comprehensive cost-cutting and operational initiatives that we implemented during the past year,” said McKim. “We made progress toward our goal of internalizing more of our transportation and disposal costs. Also, we continued to closely manage our environmental and capital expenditures, limiting spending on these during the second quarter to $2.6 million and $6.7 million, respectively.”

 

Non-GAAP Second-Quarter Results

 

The Company reported EBITDA for the second quarter of 2004 of $19.4 million compared with EBITDA of $9.8 million in the second quarter of 2003.

 

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 loan agreements, as described in the following reconciliation showing the differences between reported income (loss) and EBITDA for the second quarter of 2004, and the second quarter of 2003 (in thousands):

 

     For the three months ended:  
    

June 30,

2004


     June 30,
2003


 

Net income (loss)

   $ (12,127 )    $ (6,799 )

Accretion of environmental liabilities

     2,619        2,783  

Depreciation and amortization

     6,256        6,439  

Interest expense, net

     5,443        5,979  

Provision for income taxes

     2,314        1,262  

Non-recurring severance charges

     —          265  

(Gain) loss on sale of fixed assets

     (242 )      267  

Loss on refinancing

     7,099        —    

Refinancing transaction costs

     1,126        —    

Change in value of embedded derivative

     6,877        (429 )
    


  


EBITDA

   $ 19,365      $ 9,767  
    


  


 

 

LOGO

ENVIRONMENTAL SERVICES, INC.

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


Press Release

 

Clean Harbors Announces Second Quarter 2004 Financial Results

 

Business Outlook

 

“We established some momentum in the second quarter including securing several sizeable contracts in our Site Services Business, and winning some larger remediation projects to feed our landfills and incinerators,” said McKim. “Going forward, we will continue executing our ongoing top- and bottom-line initiatives. For the third quarter of 2004, we are expecting 4 percent to 7 percent revenue growth over the third-quarter of 2003, and EBITDA in the range of $17.5 million to $20 million. As planned, during the third quarter, some of our incinerators will be shut down for a period of time for scheduled maintenance.”

 

“With the refinancing of our capital structure now complete, we have greatly improved our long-term financial stability and are evaluating whether to consider smaller bolt-on acquisitions to expand our presence in specific regions,” concluded McKim.

 

Conference Call Information

 

Clean Harbors will conduct a conference call for investors to discuss the information contained in this news release today, Wednesday, July 28, 2004 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 more than 30,000 customers, comprising of more than 175 Fortune 500 companies, thousands of smaller private entities and numerous 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.

 

 

LOGO

ENVIRONMENTAL SERVICES, INC.

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


Press Release

 

Clean Harbors Announces Second Quarter 2004 Financial Results

 

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.

 

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;

 

    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 successfully complete the integration of the CSD acquisition which became effective in September 2002 and to manage the significant environmental liabilities which it assumed in connection with that acquisition;

 

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

 

 

LOGO

ENVIRONMENTAL SERVICES, INC.

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


Press Release

 

Clean Harbors Announces Second Quarter 2004 Financial Results

 

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 Item 7, for the fiscal year ended December 31, 2003, and its Form 10-Q for the quarter ended June 30, 2004, which will be filed with the SEC in August.

 

Contacts:

 

Mark Burgess

Executive Vice President of Administration

and Chief Financial Officer

Clean Harbors, Inc.

781-849-1800

InvestorRelations@cleanharbors.com

 

Tim Bonang

Account Executive

Sharon Merrill Associates

(617) 542-5300

tbonang@investorrelations.com

 

Financial statements follow . . .

 

 

LOGO

ENVIRONMENTAL SERVICES, INC.

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


Press Release

 

Clean Harbors Announces Second Quarter 2004 Financial Results

 

CLEAN HARBORS, INC. AND SUBSIDIARIES

 

CONSOLIDATED STATEMENTS OF OPERATIONS

Unaudited

(in thousands except per share amounts)

 

     Three Months Ended
June 30,


   

Six Months Ended

June 30,


 
     2004

    2003

    2004

    2003

 

Revenues

   $ 161,631     $ 172,035     $ 304,388     $ 314,340  

Cost of revenues

     115,842       131,797       223,302       238,411  

Selling, general and administrative expenses

     27,550       30,736       50,998       57,800  

Accretion of environmental liabilities

     2,619       2,783       5,207       5,516  

Depreciation and amortization

     6,256       6,439       11,661       13,087  

Restructuring

     —         —         —         (124 )
    


 


 


 


Income (loss) from operations

     9,364       280       13,220       (350 )

Other income (expense)

     (6,635 )     162       (1,104 )     154  

Refinancing (expenses), net

     (7,099 )     —         (7,099 )     —    

Interest expense, net

     (5,443 )     (5,979 )     (10,801 )     (11,489 )
    


 


 


 


Loss before provision for income taxes and cumulative effect of change in accounting principle

     (9,813 )     (5,537 )     (5,784 )     (11,685 )

Provision for income taxes

     2,314       1,262       3,526       2,250  
    


 


 


 


Net loss before cumulative effect of change in accounting principle

     (12,127 )     (6,799 )     (9,310 )     (13,935 )

Cumulative effect of change in accounting principle, net of tax

     —         —         —         66  
    


 


 


 


Net loss

     (12,127 )     (6,799 )     (9,310 )     (14,001 )

Dividends and accretion on preferred stock

     10,761       814       11,616       1,618  
    


 


 


 


Net loss attributable to common shareholders

   $ (22,888 )   $ (7,613 )   $ (20,926 )   $ (15,619 )
    


 


 


 


Basic and diluted loss per share:

                                

Loss before cumulative effect of change in accounting principle

   $ (1.63 )   $ (0.57 )   $ (1.49 )   $ (1.17 )
    


 


 


 


Cumulative effect of change in accounting principle, net of tax

   $ —       $ —       $ —       $ —    
    


 


 


 


Loss attributable to common shareholders

   $ (1.63 )   $ (0.57 )   $ (1.49 )   $ (1.17 )
    


 


 


 


Weighted average common shares outstanding

     14,044       13,436       14,002       13,353  
    


 


 


 


 

 

LOGO

ENVIRONMENTAL SERVICES, INC.

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


Press Release

 

Clean Harbors Announces Second Quarter 2004 Financial Results

 

CLEAN HARBORS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

ASSETS

(dollars in thousands)

 

     June 30,
2004


   December 31,
2003


     (Unaudited)     

Current assets:

             

Cash and cash equivalents

   $ 17,389    $ 6,331

Restricted cash

     3,913      —  

Accounts receivable, net of allowance for doubtful accounts of $3,136 and $3,572, respectively

     113,340      114,429

Unbilled accounts receivable

     8,251      9,476

Deferred costs

     5,425      5,395

Prepaid expenses

     10,040      8,582

Supplies inventories

     9,774      9,018

Deferred tax asset

     171      178

Properties held for sale

     12,285      12,690
    

  

Total current assets

     180,588      166,099
    

  

Property, plant and equipment, net

     170,698      166,542
    

  

Other assets:

             

Restricted cash

     —        88,817

Deferred financing costs

     9,556      6,297

Goodwill

     19,032      19,032

Permits and other intangibles, net

     76,728      79,811

Deferred tax asset

     6,356      6,594

Other

     8,083      6,967
    

  

       119,755      207,518
    

  

Total assets

   $ 471,041    $ 540,159
    

  

 

 

LOGO

ENVIRONMENTAL SERVICES, INC.

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


Press Release

 

Clean Harbors Announces Second Quarter 2004 Financial Results

 

CLEAN HARBORS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK

AND STOCKHOLDERS’ EQUITY (DEFICIT)

(dollars in thousands)

 

     June 30,
2004


    December 31,
2003


     (Unaudited)      

Current liabilities:

              

Uncashed checks

   $ 4,805     $ 5,983

Revolving credit facility

     —         35,291

Current portion of capital lease obligations

     1,459       1,207

Accounts payable

     59,098       60,611

Accrued disposal costs

     2,466       2,021

Deferred revenue

     23,379       22,799

Other accrued expenses

     34,863       32,240

Current portion of environmental liabilities

     18,648       21,282

Income taxes payable

     5,050       2,623
    


 

Total current liabilities

     149,768       184,057
    


 

Other liabilities:

              

Environmental liabilities, less current portion

     163,516       161,849

Long-term obligations, less current maturities

     148,045       147,209

Capital lease obligations, less current portion

     3,880       3,412

Other long-term liabilities

     8,253       18,055

Accrued pension cost

     609       633
    


 

Total other liabilities

     324,303       331,158
    


 

Commitments and contingent liabilities

              

Redeemable Series C Convertible Preferred Stock, $.01 par value: Authorized 25,000 shares; Issued and outstanding 0 and 25,000 shares, respectively, net of issuance costs and fair value of embedded derivative

     —         15,631

Total stockholders’ equity (deficit)

     (3,030 )     9,313
    


 

Total liabilities, redeemable convertible preferred stock and stockholders’ equity (deficit)

   $ 471,041     $ 540,159
    


 

 

 

LOGO

ENVIRONMENTAL SERVICES, INC.

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