Clean Harbors Announces Fourth-Quarter and Year-End 2017 Financial Results
- Increased Q4 Revenues 8% to $747.4 Million With Growth Across All Segments; Full-Year Revenues Up
7% to $2.94 Billion
- Delivered Q4 Net Income of $84.2 Million and GAAP EPS of $1.48 Reflecting Significant Net Benefit
from U.S. Tax Law Changes; Full-Year Net Income of $100.7 Million and GAAP EPS of $1.76
- Reported Q4 Adjusted EBITDA of $101.8 Million; Full-Year Adjusted EBITDA of $425.7
Million
- Achieved Full-Year Net Cash from Operating Activities of $285.7 Million and 2017 Adjusted Free
Cash Flow of $140.2 Million
- Provides 2018 Adjusted EBITDA Guidance of $440 Million to $480 Million
- Completed Acquisition of Veolia North America’s U.S. Industrial Cleaning Services
Division
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, 2017.
“We delivered solid fourth-quarter results that were in line with our expectations as we benefited from an improving
macroeconomic environment and favorable industry trends,” said Alan S. McKim, Chairman, President and Chief Executive Officer. “Our
top-line performance reflected a successful execution of our corporate strategy, as all four reporting segments delivered growth in
the quarter. Our Adjusted EBITDA improvement was driven by a 23% increase in Safety-Kleen as well as profitable growth in Technical
Services.”
Fourth-quarter revenues increased 8% to $747.4 million, compared with $692.1 million in the same period a year ago. Income from
operations was $27.9 million, compared with $21.9 million in the fourth quarter of 2016.
Net income for the fourth quarter of 2017 was $84.2 million or $1.48 per diluted share. This result included a $93.0 million net
benefit due to recent tax law changes, partly offset by charges of $4.9 million related to non-cash valuation allowances on tax
loss carryforwards generated by certain Canadian subsidiaries and other tax-related charges. Net loss for the fourth quarter of
2016 was $12.7 million, or $0.22 per share, which included the recognition of non-cash valuation allowances on tax loss
carryforwards generated by certain Canadian subsidiaries of $9.6 million.
Adjusted net loss for each of the fourth quarters of 2017 and 2016 was $3.4 million, or $0.06 per share. Net income (loss) and
adjusted net loss results for the fourth quarters of 2017 and 2016 included pre-tax integration and severance costs of $5.7 million
and $5.9 million, respectively.
Adjusted EBITDA (see description below) in the fourth quarter of 2017 increased 6% to $101.8 million, compared with $95.9
million in the same period of 2016.
“In our Technical Services segment, incinerator utilization was an impressive 92% in the quarter, and landfill volumes rose 18%
on a combination of higher base business and project work,” McKim said. “Our Safety-Kleen segment delivered increased revenue and
Adjusted EBITDA margins of 24.5%, reflecting effective spread management and the continued rebound in energy prices.”
Completion of Veolia Transaction
The Company recently completed its previously announced acquisition of Veolia North America’s U.S. Industrial Cleaning Services
Division. Clean Harbors acquired the business for $120 million in an all-cash transaction, subject to customary post-closing
adjustments. The business, which generated revenues of approximately $210 million in 2017, employs approximately 1,300 employees
and maintains an extensive fleet of vehicles and equipment at over 60 operating locations across the United States.
“We are excited about the numerous benefits this transaction will deliver for our customers, shareholders and Industrial
Services employees,” said McKim. “It provides significant scale and industrial services capabilities while more than doubling the
size of our existing U.S. Industrial Services business. The acquired business’ operational footprint, particularly its strong
presence in the Midwest, complements our existing network of locations. The addition of this business will create new cross-selling
opportunities and drive incremental volumes into our waste disposal network. We believe this transaction enhances long-term
shareholder value and will support our profitable growth momentum in 2018 and beyond. We welcome the Veolia employees to the Clean
Harbors team and look forward to working together.”
2017 Financial Results
Clean Harbors revenues for 2017 increased 7% to $2.94 billion, compared with $2.76 billion in 2016.
GAAP net income for 2017 was $100.7 million, or $1.76 per diluted share, which includes the net benefit from U.S. tax law
changes, a gain on sale of business, a loss on the early extinguishment of debt, non-cash valuation allowances related to Canadian
operations and other tax charges. GAAP net loss for 2016 was $39.9 million, or $0.69 per share, which included non-cash valuation
allowances primarily related to Canadian operations, a non-cash goodwill impairment charge and a gain on sale of business.
Excluding these items, the Company reported adjusted net income for 2017 of $11.6 million, or $0.20 per diluted share, compared
with adjusted net income of $1.3 million, or $0.02 per diluted share, in 2016. Net income and adjusted net income for 2017 included
$11.4 million of pre-tax integration and severance costs; net loss and adjusted net income for 2016 included $24.4 million of
pre-tax integration and severance costs.
Adjusted EBITDA (see description below) was $425.7 million in 2017, compared with $400.4 million in 2016.
“Clean Harbors returned to profitable growth in 2017, as we began to harvest the investments we’ve made in several growth
initiatives,” said McKim. “During the year, we commercially launched our 70,000-ton hazardous waste incinerator in El Dorado,
Arkansas – the first new commercial U.S. incinerator to be permitted and opened in 20 years. Though the incinerator incurred
several unplanned outages related to the start-up of the plant, we remain enthusiastic about its long-term potential. We also began
the rollout of Safety-Kleen’s closed loop offering, selling and delivering lubricants directly to more than 15,000 unique
customers. The growth of Safety-Kleen was supported by the opening of our Customer Care Center, which improves efficiencies by
centralizing many functions including call operations, routing, collections and customer service.”
Business Outlook and Financial Guidance
“We begin 2018 with positive momentum in our key businesses and are excited about our prospects for the year,” McKim said. “We
are focused on enhancing our margins through better pricing, improving our revenue mix, increasing efficiencies and capitalizing on
our growth initiatives. We expect Tech Services to deliver higher profitability due to our new incinerator’s second full year of
operation and the strength of the industrial economy, particularly the expansion in the chemical space. Safety-Kleen is on track
for another solid year of profitable growth. Adding Veolia’s U.S. industrial cleaning business should enable our industrial team to
gain meaningful traction. The improving energy markets bode well for us in multiple areas. Overall, we anticipate a strong Adjusted
EBITDA and adjusted free cash flow performance in 2018.”
Based on its 2017 financial performance, current market conditions and the Veolia transaction, Clean Harbors expects full-year
2018 Adjusted EBITDA in the range of $440 million to $480 million. On a GAAP basis, the Company’s guidance is based on anticipated
2018 net income in the range of $17 million to $56 million. A reconciliation of the Company’s Adjusted EBITDA guidance to net
income guidance is included below. For 2018, Clean Harbors expects to generate adjusted free cash flow in the range of $125 million
to $155 million, which is based on anticipated 2018 net cash from operating activities in the range of $290 million to $330
million.
Non-GAAP Results
Clean Harbors reports Adjusted EBITDA, which is a non-GAAP financial measure and should not be considered an alternative to net
income or other measurements under generally accepted accounting principles (GAAP), but viewed only as a supplement to those
measurements. Adjusted EBITDA is not calculated identically by all companies, and therefore the Company’s measurements of Adjusted
EBITDA may not be comparable to similarly titled measures reported by other companies. Clean Harbors believes that Adjusted EBITDA
provides additional useful information to investors since the Company’s loan covenants are based upon levels of Adjusted EBITDA
achieved and management routinely evaluates the performance of its businesses based upon levels of Adjusted EBITDA. The Company
defines Adjusted EBITDA in accordance with its existing credit agreement, as described in the following reconciliation showing the
differences between reported net income (loss) and Adjusted EBITDA for the three and twelve months ended December 31, 2017 and 2016
(in thousands):
| |
|
|
For the Three Months Ended:
|
|
For the Year Ended:
|
|
|
December 31, |
|
December 31, |
|
December 31, |
|
December 31, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
|
|
|
|
|
|
|
|
| Net income (loss) |
|
$ |
84,194 |
|
|
|
($12,713 |
) |
|
$ |
100,739 |
|
|
|
($39,873 |
) |
| Accretion of environmental liabilities |
|
|
2,407 |
|
|
|
2,648 |
|
|
|
9,460 |
|
|
|
10,177 |
|
| Depreciation and amortization |
|
|
71,490 |
|
|
|
71,347 |
|
|
|
288,422 |
|
|
|
287,002 |
|
| Goodwill impairment charge |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
34,013 |
|
| Other expense (income), net |
|
|
3,305 |
|
|
|
(6,932 |
) |
|
|
6,119 |
|
|
|
(6,195 |
) |
| Loss on early extinguishment of debt |
|
|
— |
|
|
|
— |
|
|
|
7,891 |
|
|
|
— |
|
| Loss (gain) on sale of businesses |
|
|
913 |
|
|
|
(453 |
) |
|
|
(30,732 |
) |
|
|
(16,884 |
) |
| Interest expense, net |
|
|
20,065 |
|
|
|
21,333 |
|
|
|
85,808 |
|
|
|
83,525 |
|
| (Benefit) provision for income taxes |
|
|
(80,542 |
) |
|
|
20,708 |
|
|
|
(42,050 |
) |
|
|
48,589 |
|
| Adjusted EBITDA |
|
$ |
101,832 |
|
|
$ |
95,938 |
|
|
$ |
425,657 |
|
|
$ |
400,354 |
|
| |
This press release includes a discussion of income from operations, net income (loss) and earnings (loss) per share adjusted for
the loss on goodwill impairment charge, loss on early extinguishment of debt, (loss) gain on sale of businesses, the impact of
recent U.S. tax law changes, non-cash tax-related valuation allowances and other tax-related changes as identified in the
reconciliations provided below. The Company believes that discussion of these additional non-GAAP measures provides investors with
meaningful comparisons of current results to prior periods’ results by excluding items that the Company does not believe reflect
its fundamental business performance. The following shows the difference between income from operations and adjusted income from
operations, net income (loss) to adjusted net (loss) income, and earnings (loss) per share to adjusted (loss) earnings per share
for the three and twelve months ended December 31, 2017 and 2016 (in thousands, except per share amounts):
|
|
For the Three Months Ended: |
|
For the Year Ended: |
|
|
December 31, |
|
December 31, |
|
December 31, |
|
December 31, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
| Adjusted income from operations |
|
|
|
|
|
|
|
|
| Income from operations |
|
$ |
27,935 |
|
|
$ |
21,943 |
|
|
$ |
127,775 |
|
|
$ |
69,162 |
|
| Goodwill impairment charge |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
34,013 |
|
| Adjusted income from operations |
|
$ |
27,935 |
|
|
$ |
21,943 |
|
|
$ |
127,775 |
|
|
$ |
103,175 |
|
|
|
|
|
|
|
|
|
|
| Adjusted net (loss) income |
|
|
|
|
|
|
|
|
| Net income (loss) |
|
$ |
84,194 |
|
|
|
($12,713 |
) |
|
$ |
100,739 |
|
|
|
($39,873 |
) |
| Goodwill impairment charge, net of $0 taxes |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
34,013 |
|
| Loss on early extinguishment of debt, net of tax |
|
|
— |
|
|
|
— |
|
|
|
4,735 |
|
|
|
— |
|
| Loss (gain) on sale of businesses, net of tax |
|
|
548 |
|
|
|
(289 |
) |
|
|
(17,919 |
) |
|
|
(15,380 |
) |
| Adjustments related to tax law changes |
|
|
(93,009 |
) |
|
|
— |
|
|
|
(93,009 |
) |
|
|
— |
|
| Tax-related valuation allowances and other* |
|
|
4,905 |
|
|
|
9,609 |
|
|
|
17,050 |
|
|
|
22,564 |
|
| Adjusted net (loss) income |
|
|
($3,362 |
) |
|
|
($3,393 |
) |
|
$ |
11,596 |
|
|
$ |
1,324 |
|
|
|
|
|
|
|
|
|
|
|
Adjusted (loss) earnings per share
|
|
|
|
|
|
|
|
|
| Earnings (loss) per share |
|
$ |
1.48 |
|
|
|
($0.22 |
) |
|
$ |
1.76 |
|
|
|
($0.69 |
) |
| Goodwill impairment charge, net of $0 taxes |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.59 |
|
| Loss on early extinguishment of debt, net of tax |
|
|
— |
|
|
|
— |
|
|
|
0.08 |
|
|
|
— |
|
| Loss (gain) on sale of businesses, net of tax |
|
|
0.01 |
|
|
|
(0.01 |
) |
|
|
(0.31 |
) |
|
|
(0.27 |
) |
| Adjustments related to tax law changes |
|
|
(1.63 |
) |
|
|
— |
|
|
|
(1.63 |
) |
|
|
— |
|
| Tax-related valuation allowances and other* |
|
|
0.08 |
|
|
|
0.17 |
|
|
|
0.30 |
|
|
|
0.39 |
|
| Adjusted (loss) earnings per share |
|
|
($0.06 |
) |
|
|
($0.06 |
) |
|
$ |
0.20 |
|
|
$ |
0.02 |
|
| * |
|
For the three and twelve months ended December 31, 2017, other amounts include a $2.6
million charge, or $0.04 per share, related to unrecognized tax benefits associated with prior year tax positions taken by the
Company. |
|
|
|
Adjusted Free Cash Flow Reconciliation
Clean Harbors reports adjusted free cash flow, which it considers to be a measurement of liquidity which provides useful
information to investors about our ability to generate cash. The Company defines adjusted free cash flow as net cash from operating
activities excluding cash impacts of items derived from non-operating activities, such as taxes paid in connection with
divestitures, less additions to property, plant and equipment plus proceeds from sales of fixed assets. Adjusted free cash flow
should not be considered an alternative to net cash from operating activities or other measurements under GAAP. Adjusted free cash
flow is not calculated identically by all companies, and therefore our measurements of adjusted free cash flow may not be
comparable to similarly titled measures reported by other companies.
An itemized reconciliation between net cash from operating activities and adjusted free cash flow is as follows (in
thousands):
| |
|
|
For the Three Months Ended: |
|
For the Year Ended: |
|
|
December 31, |
|
December 31, |
|
December 31, |
|
December 31, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
| Adjusted free cash flow |
|
|
|
|
|
|
|
|
| Net cash from operating activities |
|
$ |
64,229 |
|
|
$ |
80,797 |
|
|
$ |
285,698 |
|
|
$ |
259,624 |
|
| Additions to property, plant and equipment |
|
|
(39,271 |
) |
|
|
(44,036 |
) |
|
|
(167,007 |
) |
|
|
(219,384 |
) |
| Proceeds from sale and disposal of fixed assets |
|
|
1,749 |
|
|
|
16,835 |
|
|
|
7,124 |
|
|
|
20,817 |
|
| Tax liability on sale of business |
|
|
14,423 |
|
|
|
— |
|
|
|
14,423 |
|
|
|
— |
|
| Adjusted free cash flow |
|
$ |
41,130 |
|
|
$ |
53,596 |
|
|
$ |
140,238 |
|
|
$ |
61,057 |
|
| |
Adjusted EBITDA Guidance Reconciliation
An itemized reconciliation between projected net income and projected Adjusted EBITDA is as follows (in millions):
|
|
|
|
|
For the Year Ending |
|
|
December 31, 2018 |
| Projected GAAP net income |
|
$17 |
|
|
|
to |
|
|
|
$56 |
| Adjustments: |
|
|
|
|
|
|
|
|
|
|
| Accretion of environmental liabilities |
|
11 |
|
|
|
to |
|
|
|
10 |
| Depreciation and amortization |
|
300 |
|
|
|
to |
|
|
|
290 |
| Interest expense, net |
|
86 |
|
|
|
to |
|
|
|
82 |
| Provision for income taxes |
|
26 |
|
|
|
to |
|
|
|
42 |
| Projected Adjusted EBITDA |
|
$440 |
|
|
|
to |
|
|
|
$480 |
|
|
|
|
|
|
|
|
|
|
|
Adjusted Free Cash Flow Guidance Reconciliation
An itemized reconciliation between projected cash from operating activities and projected adjusted free cash flow is as follows
(in millions):
| |
|
|
For the Year Ending
|
|
|
December 31, 2018
|
| Projected cash from operating activities |
|
$295 |
|
|
|
to |
|
|
|
$345 |
| Additions to property, plant and equipment |
|
(180) |
|
|
|
to |
|
|
|
(200) |
| Proceeds from sale and disposal of fixed assets |
|
10 |
|
|
|
to |
|
|
|
10 |
| Projected adjusted free cash flow |
|
$125 |
|
|
|
to |
|
|
|
$155 |
| |
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. During the call, management will discuss Clean Harbors’ financial results, business outlook and growth strategy.
Investors who wish to listen to the webcast and view the accompanying slides 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 time. If you are unable to listen to the live conference call, the webcast will be archived on the Company’s website.
About Clean Harbors
Clean Harbors (NYSE: CLH) is North America’s leading provider of environmental, energy and industrial services. The Company
serves a diverse customer base, including a majority of the Fortune 500, across the chemical, energy, manufacturing and additional
markets, as well as numerous government agencies. These customers rely on Clean Harbors to deliver a broad range of services such
as end-to-end hazardous waste management, emergency spill response, industrial cleaning and maintenance, and recycling services.
Through its Safety-Kleen subsidiary, Clean Harbors also is North America’s largest re-refiner and recycler of used oil and a
leading provider of parts washers and environmental services to commercial, industrial and automotive customers. Founded in 1980
and based in Massachusetts, Clean Harbors operates throughout the United States, Canada, 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. 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 future financial and operating results, 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 Clean Harbors’ most recently filed Form 10-K and Form 10-Q. Therefore, readers are
cautioned not to place undue reliance on these forward-looking statements. Clean Harbors undertakes no obligation to revise or
publicly release the results of any revision to these forward-looking statements other than through its filings with the Securities
and Exchange Commission, which may be viewed in the “Investors” section of Clean Harbors’ website at www.cleanharbors.com.
| |
|
CLEAN HARBORS, INC. AND SUBSIDIARIES
|
| UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS |
| (in thousands except per share amounts) |
| |
|
|
For the Three Months Ended: |
|
For the Year Ended: |
|
December 31,
2017
|
|
December 31,
2016
|
|
December 31,
2017
|
|
December 31,
2016
|
|
|
|
|
|
|
|
|
|
| Revenues |
|
$ |
747,403 |
|
|
$ |
692,113 |
|
|
$ |
2,944,978 |
|
|
$ |
2,755,226 |
|
| Cost of revenues (exclusive of items shown separately below) |
|
|
526,690 |
|
|
|
496,661 |
|
|
|
2,062,673 |
|
|
|
1,932,857 |
|
| Selling, general and administrative expenses |
|
|
118,881 |
|
|
|
99,514 |
|
|
|
456,648 |
|
|
|
422,015 |
|
| Accretion of environmental liabilities |
|
|
2,407 |
|
|
|
2,648 |
|
|
|
9,460 |
|
|
|
10,177 |
|
| Depreciation and amortization |
|
|
71,490 |
|
|
|
71,347 |
|
|
|
288,422 |
|
|
|
287,002 |
|
| Goodwill impairment charge |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
34,013 |
|
| Income from operations |
|
|
27,935 |
|
|
|
21,943 |
|
|
|
127,775 |
|
|
|
69,162 |
|
| Other (expense) income, net |
|
|
(3,305 |
) |
|
|
6,932 |
|
|
|
(6,119 |
) |
|
|
6,195 |
|
| Loss on early extinguishment of debt |
|
|
— |
|
|
|
— |
|
|
|
(7,891 |
) |
|
|
— |
|
| (Loss) gain on sale of businesses |
|
|
(913 |
) |
|
|
453 |
|
|
|
30,732 |
|
|
|
16,884 |
|
| Interest expense, net |
|
|
(20,065 |
) |
|
|
(21,333 |
) |
|
|
(85,808 |
) |
|
|
(83,525 |
) |
| Income before (benefit) provision for income taxes |
|
|
3,652 |
|
|
|
7,995 |
|
|
|
58,689 |
|
|
|
8,716 |
|
| (Benefit) provision for income taxes |
|
|
(80,542 |
) |
|
|
20,708 |
|
|
|
(42,050 |
) |
|
|
48,589 |
|
| Net income (loss) |
|
$ |
84,194 |
|
|
|
($12,713 |
) |
|
$ |
100,739 |
|
|
|
($39,873 |
) |
| Earnings (loss) per share: |
|
|
|
|
|
|
|
|
| Basic |
|
$ |
1.48 |
|
|
|
($0.22 |
) |
|
$ |
1.77 |
|
|
|
($0.69 |
) |
| Diluted |
|
$ |
1.48 |
|
|
|
($0.22 |
) |
|
$ |
1.76 |
|
|
|
($0.69 |
) |
|
|
|
|
|
|
|
|
|
| Shares used to compute earnings (loss) per share — Basic |
|
|
56,810 |
|
|
|
57,350 |
|
|
|
57,072 |
|
|
|
57,532 |
|
| Shares used to compute earnings (loss) per share — Diluted |
|
|
56,955 |
|
|
|
57,350 |
|
|
|
57,200 |
|
|
|
57,532 |
|
| |
| CLEAN HARBORS, INC. AND SUBSIDIARIES |
| UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS |
| (in thousands) |
| |
|
|
December 31, |
|
December 31, |
|
|
2017 |
|
2016 |
| Current assets: |
|
|
|
|
| Cash and cash equivalents |
|
$
|
319,399
|
|
$ |
306,997 |
| Short-term marketable securities |
|
|
38,179 |
|
|
— |
| Accounts receivable, net |
|
|
528,924 |
|
|
496,226 |
| Unbilled accounts receivable |
|
|
35,922 |
|
|
36,190 |
| Deferred costs |
|
|
20,445 |
|
|
18,914 |
| Inventories and supplies |
|
|
176,012 |
|
|
178,428 |
| Prepaid expenses and other current assets |
|
|
35,175 |
|
|
56,116 |
| Total current assets |
|
|
1,154,056 |
|
|
1,092,871 |
| Property, plant and equipment, net |
|
|
1,587,365 |
|
|
1,611,827 |
| Other assets: |
|
|
|
|
| Goodwill |
|
|
478,523 |
|
|
465,154 |
| Permits and other intangibles, net |
|
|
469,128 |
|
|
498,721 |
| Other |
|
|
17,498 |
|
|
13,347 |
| Total other assets |
|
|
965,149 |
|
|
977,222 |
| Total assets |
|
$ |
3,706,570 |
|
$ |
3,681,920 |
| Current liabilities: |
|
|
|
|
| Current portion of long-term obligations |
|
$ |
4,000 |
|
$ |
— |
| Accounts payable |
|
|
224,231 |
|
|
229,534 |
| Deferred revenue |
|
|
67,822 |
|
|
64,397 |
| Accrued expenses |
|
|
187,982 |
|
|
190,721 |
| Current portion of closure, post-closure and remedial liabilities |
|
|
19,782 |
|
|
20,016 |
| Total current liabilities |
|
|
503,817 |
|
|
504,668 |
| Other liabilities: |
|
|
|
|
| Closure and post-closure liabilities, less current portion |
|
|
54,593 |
|
|
52,111 |
| Remedial liabilities, less current portion |
|
|
111,130 |
|
|
114,211 |
| Long-term obligations, less current portion |
|
|
1,625,537 |
|
|
1,633,272 |
| Deferred taxes, unrecognized tax benefits and other long-term
liabilities |
|
|
223,291 |
|
|
293,417 |
| Total other liabilities |
|
|
2,014,551 |
|
|
2,093,011 |
| Total stockholders’ equity, net |
|
|
1,188,202 |
|
|
1,084,241 |
| Total liabilities and stockholders’ equity |
|
$ |
3,706,570 |
|
$ |
3,681,920 |
| |
| |
|
CLEAN HARBORS, INC. AND SUBSIDIARIES
|
|
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
(in thousands)
|
| |
|
|
For the Year Ended: |
|
|
December 31, 2017 |
|
December 31, 2016 |
| Cash flows from operating activities: |
|
|
|
|
| Net income (loss) |
|
$ |
100,739 |
|
|
|
($39,873 |
) |
| Adjustments to reconcile net income (loss) to net cash from operating
activities: |
|
|
|
|
| Depreciation and amortization |
|
|
288,422 |
|
|
|
287,002 |
|
| Goodwill impairment charge |
|
|
— |
|
|
|
34,013 |
|
| Allowance for doubtful accounts |
|
|
7,901 |
|
|
|
6,907 |
|
| Amortization of deferred financing costs and debt discount |
|
|
3,482 |
|
|
|
3,537 |
|
| Accretion of environmental liabilities |
|
|
9,460 |
|
|
|
10,177 |
|
| Changes in environmental liability estimates |
|
|
(195 |
) |
|
|
(4,254 |
) |
| Deferred income taxes |
|
|
(83,335 |
) |
|
|
15,184 |
|
| Other expense (income), net |
|
|
6,119 |
|
|
|
(5,685 |
) |
| Stock-based compensation |
|
|
13,146 |
|
|
|
10,481 |
|
| Excess tax benefit of stock-based compensation |
|
|
— |
|
|
|
(1,198 |
) |
| Net tax benefit on stock-based awards |
|
|
— |
|
|
|
1,165 |
|
| Gain on sale of businesses |
|
|
(30,732 |
) |
|
|
(16,884 |
) |
| Loss on early extinguishment of debt |
|
|
7,891 |
|
|
|
— |
|
| Environmental expenditures |
|
|
(12,965 |
) |
|
|
(12,170 |
) |
| Changes in assets and liabilities, net of acquisitions |
|
|
|
|
| Accounts receivable and unbilled accounts receivable |
|
|
(33,764 |
) |
|
|
(15,009 |
) |
| Inventories and supplies |
|
|
(5,002 |
) |
|
|
(16,080 |
) |
| Other current assets |
|
|
16,720 |
|
|
|
(8,036 |
) |
| Accounts payable |
|
|
(10,684 |
) |
|
|
(3,503 |
) |
| Other current and long-term liabilities |
|
|
8,495 |
|
|
|
13,850 |
|
| Net cash from operating activities |
|
|
285,698 |
|
|
|
259,624 |
|
| Cash flows used in investing activities: |
|
|
|
|
| Additions to property, plant and equipment |
|
|
(167,007 |
) |
|
(219,384)_ |
| Proceeds from sale and disposal of fixed assets |
|
|
7,124 |
|
|
|
20,817 |
|
| Acquisitions, net of cash acquired |
|
|
(49,227 |
) |
|
|
(206,915 |
) |
| Additions to intangible assets, including costs to obtain or renew permits |
|
|
(1,617 |
) |
|
|
(2,831 |
) |
| Purchases of available-for-sale securities |
|
|
(38,342 |
) |
|
|
(598 |
) |
| Proceeds on sale of businesses, net of transactional costs |
|
|
45,426 |
|
|
|
47,134 |
|
| Proceeds from sale of investments |
|
|
376 |
|
|
|
— |
|
| Net cash used in investing activities |
|
|
(203,267 |
) |
|
|
(361,777 |
) |
| Cash flows (used in) from financing activities: |
|
|
|
|
| Change in uncashed checks |
|
|
(5,940 |
) |
|
|
(3,177 |
) |
| Proceeds from exercise of stock options |
|
|
46 |
|
|
|
627 |
|
| Tax payments related to withholdings on vested restricted stock |
|
|
(3,149 |
) |
|
|
(2,819 |
) |
| Repurchases of common stock |
|
|
(48,971 |
) |
|
|
(22,188 |
) |
| Excess tax benefit of stock-based compensation |
|
|
— |
|
|
|
1,198 |
|
| Deferred financing costs paid |
|
|
(5,718 |
) |
|
|
(4,031 |
) |
| Premiums paid on early extinguishment of debt |
|
|
(6,028 |
) |
|
|
— |
|
| Principal payments on debt |
|
|
(402,000 |
) |
|
|
— |
|
| Issuance of senior secured notes, net of discount |
|
|
399,000 |
|
|
|
— |
|
| Issuance of senior unsecured notes, including premium |
|
|
— |
|
|
|
250,625 |
|
|
Net cash (used in) from financing activities
|
|
|
(72,760 |
) |
|
|
220,235 |
|
| Effect of exchange rate change on cash |
|
|
2,731 |
|
|
|
4,207 |
|
| Increase in cash and cash equivalents |
|
|
12,402 |
|
|
|
122,289 |
|
| Cash and cash equivalents, beginning of year |
|
|
306,997 |
|
|
|
184,708 |
|
| Cash and cash equivalents, end of year |
|
$ |
319,399 |
|
|
$ |
306,997 |
|
|
|
|
|
|
|
Supplemental information:
|
|
|
|
|
| Cash payments for interest and income taxes: |
|
|
|
|
| Interest paid |
|
$ |
93,174 |
|
|
$ |
88,669 |
|
| Income taxes paid |
|
|
18,682 |
|
|
|
29,255 |
|
| Non-cash investing activities: |
|
|
|
|
| Property, plant and equipment accrued |
|
|
16,109 |
|
|
|
9,214 |
|
| Transfer of inventory to property, plant and equipment |
|
|
12,641 |
|
|
|
— |
|
| Receivable for estimated purchase price adjustment |
|
|
— |
|
|
|
1,910 |
|
|
|
|
|
|
|
|
|
|
Supplemental Segment Data (in thousands)
| |
|
|
For the Three Months Ended: |
| Revenue |
|
December 31, 2017 |
|
December 31, 2016 |
|
|
|
|
Intersegment
|
|
|
|
|
|
Intersegment
|
|
|
|
|
Third Party |
|
Revenues
|
|
Direct |
|
Third Party
|
|
Revenues
|
|
Direct |
|
|
Revenues |
|
(Expense), net
|
|
Revenues |
|
Revenues |
|
(Expense), net
|
|
Revenues |
| Technical Services |
|
$ |
249,198 |
|
$ |
40,739 |
|
|
$ |
289,937 |
|
$ |
225,778 |
|
$ |
39,476 |
|
|
$ |
265,254 |
| Industrial and Field Services |
|
|
165,952 |
|
|
(9,822 |
) |
|
|
156,130 |
|
|
151,226 |
|
|
(10,218 |
) |
|
|
141,008 |
| Safety-Kleen |
|
|
302,818 |
|
|
(30,356 |
) |
|
|
272,462 |
|
|
288,969 |
|
|
(28,683 |
) |
|
|
260,286 |
| Oil, Gas and Lodging Services |
|
|
27,849 |
|
|
391 |
|
|
|
28,240 |
|
|
25,137 |
|
|
327 |
|
|
|
25,464 |
| Corporate Items |
|
|
1,586 |
|
|
(952 |
) |
|
|
634 |
|
|
1,003 |
|
|
(902 |
) |
|
|
101 |
| Total |
|
$ |
747,403 |
|
$ |
— |
|
|
$ |
747,403 |
|
$ |
692,113 |
|
$ |
— |
|
|
$ |
692,113 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Year Ended: |
| Revenue |
|
December 31, 2017 |
|
December 31, 2016 |
|
|
|
|
Intersegment
|
|
|
|
|
|
Intersegment
|
|
|
|
|
Third Party |
|
Revenues
|
|
Direct |
|
Third Party
|
|
Revenues
|
|
Direct |
|
|
Revenues |
|
(Expense), net
|
|
Revenues |
|
Revenues |
|
(Expense), net
|
|
Revenues |
| Technical Services |
|
$ |
980,232 |
|
$ |
163,917 |
|
|
$ |
1,144,149 |
|
|
$ |
906,495 |
|
$ |
150,240 |
|
|
$ |
1,056,735 |
| Industrial and Field Services |
|
|
631,216 |
|
|
(37,494 |
) |
|
|
593,722 |
|
|
|
618,245 |
|
|
(36,030 |
) |
|
|
582,215 |
| Safety-Kleen |
|
|
1,213,703 |
|
|
(125,817 |
) |
|
|
1,087,886 |
|
|
|
1,110,727 |
|
|
(114,644 |
) |
|
|
996,083 |
| Oil, Gas and Lodging Services |
|
|
117,252 |
|
|
2,351 |
|
|
|
119,603 |
|
|
|
116,692 |
|
|
3,191 |
|
|
|
119,883 |
| Corporate Items |
|
|
2,575 |
|
|
(2,957 |
) |
|
|
(382 |
) |
|
|
3,067 |
|
|
(2,757 |
) |
|
|
310 |
| Total |
|
$ |
2,944,978 |
|
$
|
—
|
|
|
$
|
2,944,978
|
|
|
$ |
2,755,226 |
|
$ |
— |
|
|
$ |
2,755,226 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended: |
|
For the Year Ended: |
|
|
December 31, |
|
December 31, |
|
December 31, |
|
December 31, |
| Adjusted EBITDA |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
|
|
|
|
|
|
|
|
| Technical Services |
|
$ |
72,686 |
|
|
$ |
69,554 |
|
|
$ |
276,592 |
|
|
$ |
271,176 |
|
| Industrial and Field Services |
|
|
6,358 |
|
|
|
12,564 |
|
|
|
43,010 |
|
|
|
51,191 |
|
| Safety-Kleen |
|
|
66,857 |
|
|
|
54,204 |
|
|
|
249,811 |
|
|
|
219,546 |
|
| Oil, Gas and Lodging Services |
|
|
739 |
|
|
|
(3,427 |
) |
|
|
1,708 |
|
|
|
(3,292 |
) |
| Corporate Items |
|
|
(44,808 |
) |
|
|
(36,957 |
) |
|
|
(145,464 |
) |
|
|
(138,267 |
) |
| Total |
|
$ |
101,832 |
|
|
$ |
95,938 |
|
|
$ |
425,657 |
|
|
$ |
400,354 |
|
Investors:
Clean Harbors, Inc.
Jim Buckley, 781-792-5100
SVP Investor Relations
Buckley.James@cleanharbors.com
or
Media:
Clean Harbors, Inc.
Eric Kraus, 781-792-5100
EVP Corporate Communications & Public Affairs
Kraus.Eric@cleanharbors.com
View source version on businesswire.com: http://www.businesswire.com/news/home/20180228005702/en/