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
third quarter ended September 30, 2008. For the third quarter of
2008, Clean Harbors reported an 11 percent increase in revenue to
$273.2 million from $245.5 million in the third quarter of 2007.
Income from operations rose 21 percent to $31.3 million from $25.9
million in the third quarter of 2007. Third quarter 2008 net income
attributable to common shareholders was $14.6 million, or $0.61 per
diluted share, which includes an $0.11 per share charge related to
the early extinguishment of $50 million in debt. This compares with
$12.9 million, or $0.63 per diluted share, in the third quarter of
2007. Weighted average diluted shares outstanding used to calculate
the net income per share in the third quarter of 2008 were 23.8
million, versus 20.7 million in the third quarter of fiscal 2007.
EBITDA (see description below) increased 18.1 percent to a record
$45.4 million in the third quarter of 2008, from $38.4 million in
the comparable period of 2007. Comments on the Third Quarter �Given
the hurricanes and flooding that affected our business during the
quarter, we were pleased to achieve our guidance,� said Alan S.
McKim, Chairman and Chief Executive Officer. �On the top-line, we
delivered another record quarter as the overall utilization rate at
our incinerators was nearly 93 percent with strong contributions
from both our U.S. and Canada facilities. This was even more
impressive given that our Deer Park, Texas incinerators were shut
down for five days due to Hurricane Ike. We estimate that
interruption of business, along with the consequent weather-related
slowdown in the region, cost us between $5 and $7 million in
revenue. Helping to offset that unexpected shortfall was
approximately $9.1 million in emergency response business stemming
from a major oil spill on the Mississippi River and some
hurricane-related work in the Gulf region. While our landfill
volumes improved sequentially, that business continued to
experience some softness related to ongoing project delays. Our
Site Services segment continued its steady performance with growth
driven by our petrochemical, specialty chemical and utilities
clients.� �In the third quarter, we continued to leverage our
extensive network of assets to grow our EBITDA at a far greater
rate than our revenues,� McKim said. �We continued to successfully
implement our pricing initiatives, pass through higher fuel
expenses and tightly manage our overall costs. One of our ongoing
areas of focus has been reducing our reliance on outside
transportation. During the quarter, we lowered our outside
transportation expense by $2.9 million compared to the third
quarter of 2007 as we gained efficiencies and expanded our internal
fleet of vehicles. As a percentage, outside transportation
represented only 5.1% of revenues compared with 6.8% in the same
period of 2007.� �Our financial position remains strong, as we
closed the third quarter with cash and equivalents of $253
million,� McKim said. �Using the proceeds from the successful
follow-on offering we completed in the second quarter, we redeemed
$50 million in outstanding Senior Secured Notes in July. As we
previously announced, we incurred a $4.3 million charge below the
EBITDA line, consisting of a prepayment penalty and non-cash
expense for the unamortized discount and financing costs related to
the notes. The elimination of these notes is expected to save the
Company an estimated $5.6 million annually in interest expense.�
Non-GAAP Third-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 third quarter and first nine months of 2008 and
2007 (in thousands): � For the three months ended: � For the nine
months ended: September 30,2008 � September 30,2007 � September
30,2008 � September 30,2007 � � Net income $14,628 $12,940 $39,537
$27,629 Accretion of environmental liabilities 2,682 2,715 8,078
7,743 Depreciation and amortization 11,414 9,814 32,695 27,801 Loss
on early extinguishment of debt 4,251 � 4,251 � Interest expense,
net 1,889 3,022 7,789 9,901 Provision for income taxes 10,388 9,978
29,381 22,691 Other (income) expense 104 (61 ) � 149 (62 ) EBITDA
$45,356 $38,408 � � $121,880 $95,703 � Business Outlook and
Financial Guidance �Despite the current economic uncertainty, we
expect to exceed our previously announced annual guidance of
revenue growth in the range of 8 to 10 percent, and EBITDA growth
in the range of 20 to 22 percent,� said McKim. �We remain
encouraged about our prospects as we enter the final quarter of the
year with momentum in both segments of our business. Within
Technical Services, our incineration volumes are healthy with a
sizeable backlog of materials and our ongoing capacity expansion
plans are proceeding on schedule. Within Site Services, our organic
growth strategy is succeeding and we have another office opening
planned for the fourth quarter. We also expect some residual
emergency response work related to the Gulf hurricanes. On the cost
side, we remain committed to our ongoing expense reduction
initiatives. We are confident that the leverage that is inherent in
our business model will enable us to continue to grow EBITDA at
relatively high margins. And our cash position affords us
significant flexibility to expand our business through selective
acquisitions and strategic investments.� Based on current market
conditions and its year-to-date performance, the Company expects
revenue in the range of $261 million to $263 million for the fourth
quarter of 2008. The Company expects to generate EBITDA for the
fourth quarter in the range of $42 million to $44 million. For
full-year 2009, the Company is early in its budgeting process, but
anticipates continued growth in revenues and profitability based on
its diversified customer base and wide range of services. Excluding
the effect of any potential acquisitions, the Company currently
expects revenue growth in the range of 5 percent to 7 percent, and
EBITDA growth in the range of 10 percent to 15 percent. Conference
Call Information Clean Harbors will conduct a conference call for
investors to discuss the information contained in this press
release today, Wednesday, November 5, 2008 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 third-quarter webcast should log onto
www.cleanharbors.com/investor_relations. The live call also can be
accessed by dialing 877.407.5790 or 201.689.8328 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 North America's leading provider of
environmental and hazardous waste management services. With an
unmatched infrastructure of waste management facilities, Clean
Harbors serves over 45,000 customers, including more than 325
Fortune 500 companies, thousands of smaller private entities and
numerous federal, state and local governmental agencies. Clean
Harbors� Technical Services provides a broad range of hazardous
material management and disposal services including hazardous and
non-hazardous waste recycling, treatment and disposal, CleanPack�
laboratory chemical packing, and household hazardous waste
management services. Clean Harbors� Site Services provides field
services, industrial services, vacuum services, emergency response
and disaster recovery, transformer services, tank cleaning and
decontamination. 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 manage the significant environmental
liabilities that it assumed in connection with the CSD and other
acquisitions; 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 www.cleanharbors.com/investor_relations. CLEAN HARBORS,
INC. AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF
OPERATIONS (in thousands except per share amounts) � � For the
three months ended: For the nine months ended: September 30, �
September 30, September 30, � September 30, 2008 2007 2008 2007 �
Revenues $273,157 $245,507 $780,925 $689,239 Cost of revenues
187,063 169,007 535,641 485,893 Selling, general and administrative
expenses 40,738 38,092 123,404 107,643 Accretion of environmental
liabilities 2,682 2,715 8,078 7,743 Depreciation and amortization
11,414 � 9,814 � 32,695 � 27,801 � Income from operations 31,260
25,879 81,107 60,159 Other (expense) income (104 ) 61 (149 ) 62
Loss on early extinguishment of debt (4,251 ) � (4,251 ) � Interest
(expense), net (1,889 ) (3,022 ) (7,789 ) (9,901 ) Income before
provision for income taxes 25,016 22,918 68,918 50,320 Provision
for income taxes 10,388 � 9,978 � 29,381 � 22,691 � Net income
14,628 12,940 39,537 27,629 Dividends on Series B Preferred Stock �
� 69 � � � 206 � Net income attributable to common stockholders
$14,628 � $12,871 � $39,537 � $27,423 � Earnings per share: Basic
income attributable to common stockholders $0.62 � $0.65 � $1.79 �
$1.39 � Diluted income attributable to common stockholders $0.61 �
$0.63 � $1.75 � $1.33 � � Weighted average common shares
outstanding 23,423 � 19,840 � 22,052 � 19,788 � Weighted average
common shares outstanding plus potentially dilutive common shares �
23,822 � 20,686 � 22,530 � 20,715 � CLEAN HARBORS, INC. AND
SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS ASSETS
(in thousands) � � September 30, December 31, 2008 2007 Current
assets: Cash and cash equivalents $ 252,959 $ 119,538 Marketable
securities 428 850 Accounts receivable, net 186,249 193,126
Unbilled accounts receivable 10,469 14,703 Deferred costs 6,382
7,359 Prepaid expenses and other current assets 6,335 10,098
Supplies inventories 27,196 22,363 Deferred tax assets 11,497
11,491 Properties held for sale � 910 ��������Total current assets
501,515 380,438 � Property, plant and equipment, net 294,398
262,601 Other assets: Long-term investments 6,625 8,500 Deferred
financing costs 3,776 5,881 Goodwill 22,726 21,572 Permits and
other intangibles, net 76,228 74,809 Deferred tax assets 11,480
12,176 Other 4,194 3,911 125,029 126,849 Total assets $920,942
$769,888 CLEAN HARBORS, INC. AND SUBSIDIARIES UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS LIABILITIES AND STOCKHOLDERS� EQUITY
(in thousands) � � September 30, December 31, 2008 2007 Current
liabilities: Uncashed checks $ 6,966 $ 5,489 Current portion of
long-term debt 19,226 � Current portion of capital lease
obligations 484 1,251 Accounts payable 73,294 81,309 Deferred
revenue 25,784 29,730 Other accrued expenses 68,977 65,789 Current
portion of closure, post-closure and remedial liabilities 17,073
18,858 Income taxes payable 172 8,427 Total current liabilities
211,976 210,853 Other liabilities: Closure and post-closure
liabilities, less current portion 25,746 24,202 Remedial
liabilities, less current portion 136,968 141,428 Long-term
obligations 51,982 120,712 Capital lease obligations, less current
portion 421 1,520 Unrecognized tax benefits and other long-term
liabilities 73,841 68,276 Total other liabilities 288,958 356,138
Total stockholders� equity, net 420,008 202,897 Total liabilities
and stockholders� equity $ 920,942 $ 769,888
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