EX-99.1 2 a12-26105_2ex99d1.htm EX-99.1

Exhibit 99.1

 

Press Release

 

Clean Harbors Reports Third-Quarter 2012 Financial Results

 

·            Company Reports Revenue of $533.8 Million

 

·            Landfill Business Delivers Record Quarter

 

·            Company Achieves EBITDA Margin of 18.8%

 

·            Safety-Kleen Acquisition Expected to Close by Year-end

 

·            Updates 2012 Guidance and Provides Preliminary 2013 Guidance

 

Norwell, Mass. — November 7, 2012 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 third quarter ended September 30, 2012.

 

Revenues for the third quarter were $533.8 million compared with $556.1 million in the same period in 2011.  Revenue in the third quarter of 2011 included approximately $42 million in emergency response revenue related to the Yellowstone River oil spill.  For the first nine months of 2012, revenue grew 13% to $1.6 billion from $1.4 billion in the same period in 2011. Income from operations in the third quarter of 2012 decreased to $56.7 million from $66.8 million in the same period of 2011 primarily based on lower revenue and an increase in depreciation and amortization expense. For the first nine months of 2012, income from operations increased to $166.0 million from $158.4 million in the first nine months of 2011.

 

Third quarter 2012 net income was $12.4 million, or $0.23 per diluted share, compared with $37.1 million, or $0.70 per diluted share, in the third quarter of 2011.  The third quarter of 2012 included a $26.4 million pre-tax charge related to the Company’s recent senior debt refinancing.  Adjusted net income, excluding the charge, was $28.8 million, or $0.54 per diluted share.  Net income for the first nine months of 2012 was $67.8 million, or $1.27 per diluted share, compared with $89.0 million, or $1.67 per diluted share.  Adjusted net income for the first nine months of 2012, excluding the charge, was $84.3 million, or $1.57 per diluted share.

 

EBITDA (see description below) was $100.5 million in the third quarter of 2012 compared with $103.8 million in the same period of 2011. For the first nine months of 2012, EBITDA grew 15% to $290.2 million from $252.6 million in the same period of 2011.

 

Comments on the Third Quarter

 

“Solid contributions from our Technical Services and Industrial Services segments enabled us to deliver high EBITDA margins of 18.8% and top $100 million in quarterly EBITDA for only the third time in our history,” said Alan S. McKim, Chairman and Chief Executive Officer. “Our EBITDA results were driven by increased efficiencies and economies of scale from our acquisitions, productivity gains across our asset base and our comprehensive cost reduction initiatives. Our third-quarter performance also reflected the diversity of our business as strong results in incineration, landfills and oil sands offset a lack of emergency response revenue and a slowdown in oil and gas field services,”

 

GRAPHIC

 

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

 



 

Press Release

 

Clean Harbors Reports Third-Quarter 2012 Financial Results

 

“Within our operating segments, Technical Services had a strong quarter as the utilization rate at our incineration facilities was a robust 91.3% based on higher U.S. volumes,” McKim said. “At the same time, our landfills business generated a record performance this quarter with a substantial increase in volumes, driven by large-scale projects and Bakken-related work.  Excluding revenue related to the Yellowstone River oil spill in 2011, our Field Services segment was flat year-over-year.  This is the fourth consecutive quarter in which we have not recorded a major emergency response event.”

 

“Our Industrial Services segment had an excellent quarter, achieving 17% growth and significantly improving its margins,” McKim said.  “This segment benefited from steady Oil Sands related work, strong utilization within our lodging business and a high level of cross-selling activity with our refinery customers.  Within our Oil & Gas Field Services segment, our revenue was down from the prior year due to the repositioning of our solids control assets in the U.S. and unfavorable weather conditions in Western Canada.”

 

Non-GAAP Results

 

Clean Harbors reports EBITDA and adjusted net income 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).  The Company believes that EBITDA 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 three and nine months ended September 30, 2012 and 2011 (in thousands):

 

 

 

For the three months ended:

 

For the nine months ended:

 

 

 

September 30,
2012

 

September 30,
2011

 

September 30,
2012

 

September 30,
2011

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

12,359

 

$

37,133

 

$

67,800

 

$

89,019

 

Accretion of environmental liabilities

 

2,488

 

2,435

 

7,409

 

7,231

 

Depreciation and amortization

 

41,300

 

34,604

 

116,794

 

87,000

 

Other expense (income)

 

91

 

(164

)

465

 

(5,931

)

Loss on early extinguishment of debt

 

26,385

 

 

26,385

 

 

Interest expense, net

 

11,596

 

10,927

 

33,836

 

28,047

 

Provision for income taxes

 

6,308

 

18,896

 

37,487

 

47,283

 

EBITDA

 

$

100,527

 

$

103,831

 

$

290,176

 

$

252,649

 

 

The Company provides adjusted net income so that analysts, investors and other interested parties have the same data it uses to assess its core operating performance.   The following reconciliation shows the differences between reported net income and adjusted net income for the three and nine months ended September 30, 2012 and 2011 (in thousands):

 

GRAPHIC

 

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

 



 

Press Release

 

Clean Harbors Reports Third-Quarter 2012 Financial Results

 

 

 

For the three months ended:

 

For the nine months ended:

 

 

 

September 30,
2012

 

September 30,
2011

 

September 30,
2012

 

September 30,
2011

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

12,359

 

$

37,133

 

$

67,800

 

$

89,019

 

Loss on early extinguishment of debt, net of tax

 

16,461

 

 

16,461

 

 

Adjusted net income

 

$

28,820

 

$

37,133

 

$

84,261

 

$

89,019

 

Adjusted net income per share

 

$

0.54

 

$

0.70

 

$

1.57

 

$

1.67

 

 

Business Outlook and Financial Guidance

 

“As we near the conclusion of 2012, we remain encouraged about our overall prospects,” McKim said. “While we experienced some turbulence in certain markets in 2012, the underlying industry and outsourcing trends remain favorable for the long-term outlook of all four of our operating segments.  We are building momentum across all of our lines of business.  Within our Environmental business, we continue to have an active pipeline of projects and ongoing engagements to generate a sizeable amount of waste volumes.  Within our Energy & Industrial business, we are looking forward to entering its strongest operating periods during the cold winter months, particularly in Western Canada and more remote locations.”

 

“Our favorable outlook is further supported by the recent announcement of a definitive agreement to acquire Safety-Kleen.  This $1.25 billion transaction, which we continue to expect to complete by year-end, is the largest in Clean Harbors’ history and we believe will add significant long-term value for our shareholders.  With industry-leading assets, a talented workforce and a strong commitment to sustainability, Safety-Kleen is a recognized leader in the environmental services field.   The addition of its re-refining waste oil and expanded solvent recycling capabilities will significantly broaden our portfolio of services.  We also expect to benefit from the consistent volumes that its business can generate for our network of waste disposal facilities.  Upon completion, we believe the merger of our two businesses should extend our growth momentum in 2013 and beyond, and greatly enhance our cash flow generation going forward,” McKim concluded.

 

GRAPHIC

 

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

 



 

Press Release

 

Clean Harbors Reports Third-Quarter 2012 Financial Results

 

Based on its year-to-date performance and current market conditions, Clean Harbors is updating its 2012 annual revenue and EBITDA guidance.  The Company now expects 2012 revenues in the range of $2.15 billion to $2.16 billion, revised from its previously announced guidance of $2.20 billion to $2.25 billion.  For 2012, the Company now expects EBITDA in the range of $375 million to $380 million, revised from its previously announced guidance of $400 million to $410 million.  This guidance does not include the revenues from the Company’s emergency response efforts associated with Hurricane Sandy as it is too early to estimate the duration of the clean-up activities presently being performed by more than 500 Clean Harbors personnel at various sites.

 

Based upon preliminary estimates of the markets it serves, the Company expects 2013 revenues in the range of $2.30 billion to $2.35 billion.  The Company expects its EBITDA margin to be approximately 18.5% at this level of growth in 2013, which translates into an EBITDA range of $425 million to $435 million.  This guidance is exclusive of the planned acquisition of Safety-Kleen or any other potential future acquisitions.  As Clean Harbors completes its 2013 budgeting process in the coming months, it plans to update this preliminary guidance in conjunction with the announcement of its fourth-quarter and year-end results in February 2013.

 

Conference Call Information

 

Clean Harbors will conduct a conference call for investors today at 9:00 a.m. (ET) to discuss the information contained in this press release.  On the call, management will discuss Clean Harbors’ financial results, recently announced acquisition of Safety-Kleen, business outlook and growth strategy.

 

Investors who wish to listen to the 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 201.689.8881 or 877.709.8155 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 60,000 customers, including a majority of the Fortune 500 companies, thousands of smaller private entities and numerous federal, state, provincial and local governmental agencies.

 

Headquartered in Norwell, Massachusetts, Clean Harbors has more than 200 locations, including over 50 waste management facilities, throughout North America in 38 U.S. states, seven Canadian provinces, Mexico and Puerto Rico.  For more information, visit www.cleanharbors.com.

 

GRAPHIC

 

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

 



 

Press Release

 

Clean Harbors Reports Third-Quarter 2012 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.  These forward-looking statements are generally identifiable by use of the words “believes,” “expects,” “intends,” “anticipates,” “plans to,” “estimates,” “projects,” or similar expressions.  Such statements may include, but are not limited to, statements about the Company’s business outlook and financial guidance and other statements that are not historical facts.  Such statements are based upon the beliefs and expectations of Clean Harbors’ management as of this date only and are subject to certain risks and uncertainties that could cause actual results to differ materially, including, without limitation, those items identified as “risk factors” in the Company’s most recently filed Form 10-K and Form 10-Q. Therefore, readers are cautioned not to place undue reliance on these forward-looking statements.  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, which may be viewed in the “Investors” section of the Company’s website at www.cleanharbors.com.

 

Contacts:

 

 

 

James M. Rutledge

Jim Buckley

Vice Chairman, President and Chief Operating Officer

Executive Vice President

Clean Harbors, Inc.

Sharon Merrill Associates

781.792.5100

617.542.5300

InvestorRelations@cleanharbors.com

clh@investorrelations.com

 

GRAPHIC

 

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

 



 

Press Release

 

Clean Harbors Reports Third-Quarter 2012 Financial Results

 

CLEAN HARBORS, INC. AND SUBSIDIARIES

 

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

 

 (in thousands except per share amounts)

 

 

 

For the three months ended:

 

For the nine months ended:

 

 

 

September 30,

 

September 30,

 

September 30,

 

September 30,

 

 

 

2012

 

2011

 

2012

 

2011

 

Revenues

 

$

533,806

 

$

556,053

 

$

1,628,946

 

$

1,438,250

 

Cost of revenues (exclusive of items shown separately below)

 

372,940

 

386,518

 

1,140,878

 

1,006,849

 

Selling, general and administrative expenses

 

60,339

 

65,704

 

197,892

 

178,752

 

Accretion of environmental liabilities

 

2,488

 

2,435

 

7,409

 

7,231

 

Depreciation and amortization

 

41,300

 

34,604

 

116,794

 

87,000

 

Income from operations

 

56,739

 

66,792

 

165,973

 

158,418

 

Other (expense) income

 

(91

)

164

 

(465

)

5,931

 

Loss on early extinguishment of debt

 

(26,385

)

 

(26,385

)

 

Interest (expense), net

 

(11,596

)

(10,927

)

(33,836

)

(28,047

)

Income before provision for income taxes

 

18,667

 

56,029

 

105,287

 

136,302

 

Provision for income taxes

 

6,308

 

18,896

 

37,487

 

47,283

 

Net income

 

$

12,359

 

$

37,133

 

$

67,800

 

$

89,019

 

Earnings per share:

 

 

 

 

 

 

 

 

 

Basic

 

$

0.23

 

$

0.70

 

$

1.27

 

$

1.68

 

Diluted

 

$

0.23

 

$

0.70

 

$

1.27

 

$

1.67

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

53,374

 

53,023

 

53,303

 

52,921

 

Weighted average common shares outstanding plus potentially dilutive common shares

 

53,565

 

53,370

 

53,519

 

53,298

 

 

GRAPHIC

 

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

 



 

Press Release

 

Clean Harbors Reports Third-Quarter 2012 Financial Results

 

CLEAN HARBORS, INC. AND SUBSIDIARIES

 

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

 

ASSETS

 

(in thousands)

 

 

 

September 30,

 

December 31,

 

 

 

2012

 

2011

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

523,614

 

$

260,723

 

Marketable securities

 

11,113

 

111

 

Accounts receivable, net

 

399,362

 

449,553

 

Unbilled accounts receivable

 

34,401

 

29,385

 

Deferred costs

 

6,995

 

5,903

 

Prepaid expenses and other current assets

 

53,252

 

73,349

 

Supplies inventories

 

63,934

 

56,242

 

Deferred tax assets

 

16,617

 

16,602

 

Total current assets

 

1,109,288

 

891,868

 

 

 

 

 

 

 

Property, plant and equipment, net

 

1,003,414

 

903,947

 

 

 

 

 

 

 

Other assets:

 

 

 

 

 

Long-term investments

 

4,326

 

4,245

 

Deferred financing costs

 

12,530

 

13,607

 

Goodwill

 

157,724

 

122,392

 

Permits and other intangibles, net

 

151,810

 

139,644

 

Other

 

10,311

 

10,100

 

Total other assets

 

336,701

 

289,988

 

Total assets

 

$

2,449,403

 

$

2,085,803

 

 

GRAPHIC

 

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

 



 

Press Release

 

Clean Harbors Reports Third-Quarter 2012 Financial Results

 

CLEAN HARBORS, INC. AND SUBSIDIARIES

 

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

(in thousands)

 

 

 

September 30,

 

December 31,

 

 

 

2012

 

2011

 

Current liabilities:

 

 

 

 

 

Current portion of capital lease obligations

 

$

5,937

 

$

8,310

 

Accounts payable

 

174,327

 

178,084

 

Deferred revenue

 

29,060

 

32,297

 

Accrued expenses

 

136,687

 

147,992

 

Current portion of closure, post-closure and remedial liabilities

 

19,552

 

15,059

 

Total current liabilities

 

365,563

 

381,742

 

Other liabilities:

 

 

 

 

 

Closure and post-closure liabilities, less current portion

 

29,712

 

30,996

 

Remedial liabilities, less current portion

 

117,981

 

124,146

 

Long-term obligations

 

800,000

 

524,203

 

Capital lease obligations, less current portion

 

3,477

 

6,375

 

Unrecognized tax benefits and other long-term liabilities

 

125,915

 

117,354

 

Total other liabilities

 

1,077,085

 

803,074

 

Total stockholders’ equity, net

 

1,006,755

 

900,987

 

Total liabilities and stockholders’ equity

 

$

2,449,403

 

$

2,085,803

 

 

GRAPHIC

 

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

 



 

Press Release

 

Clean Harbors Reports Third-Quarter 2012 Financial Results

 

Supplemental Segment Data (in thousands)

 

 

 

For the three months ended:

 

For the nine months ended:

 

 

 

September 30,
2012

 

September 30,
2011

 

September 30,
2012

 

September 30,

2011

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

 

 

 

 

 

 

 

 

Technical Services

 

$

242,106

 

$

228,358

 

$

698,853

 

$

650,368

 

Field Services

 

57,663

 

99,520

 

164,248

 

203,098

 

Industrial Services

 

144,521

 

123,468

 

438,888

 

344,317

 

Oil & Gas Field Services

 

89,915

 

105,014

 

327,120

 

241,412

 

Corporate Items

 

(399

)

(307

)

(163

)

(945

)

Total

 

$

533,806

 

$

556,053

 

$

1,628,946

 

$

1,438,250

 

 

Non-GAAP 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.

 

 

 

For the three months ended:

 

For the nine months ended:

 

 

 

September 30,
2012

 

September 30,
2011

 

September 30,
2012

 

September 30,
2011

 

 

 

 

 

 

 

 

 

 

 

EBITDA

 

 

 

 

 

 

 

 

 

Technical Services

 

$

67,332

 

$

62,531

 

$

184,874

 

$

174,033

 

Field Services

 

5,707

 

19,318

 

15,599

 

31,527

 

Industrial Services

 

37,860

 

25,933

 

107,452

 

77,630

 

Oil & Gas Field Services

 

14,752

 

25,062

 

60,961

 

45,748

 

Corporate Items

 

(25,124

)

(29,013

)

(78,710

)

(76,289

)

Total

 

$

100,527

 

$

103,831

 

$

290,176

 

$

252,649

 

 

GRAPHIC

 

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