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Clean Harbors — Feb 19, 2025 release

Fiscal 2024 fourth-quarter results · 8-K Item 2.02 · Exhibit 99.1 · 0000822818-25-000004
Open on SEC.gov ↗
Showing in the filing
Adjusted EBITDA
“$1.15 billion to $1.21 billion”
Period
FY2025
Measure
Company-defined measure
Source
Prose
All guidance in this release · 17
Adjusted EBITDA margin for FY2025
“continued Adjusted EBITDA margin improvement based on our pricing, cost reduction and productivity initiatives”
Adjusted EBITDA growth (ES segment) for Q1 FY2025
“4%-6% year-over-year”
Adjusted EBITDA for FY2025
“$1.15 billion to $1.21 billion”
GAAP net income (basis for Adjusted EBITDA) for FY2025
“in the range of $376 million to $427 million”
Net cash from operating activities (basis fo… for FY2025
“in the range of $775 million to $865 million”
Projected GAAP net income for FY2025
“$376 to $427”
Accretion of environmental liabilities for FY2025
“15 to 14”
Stock-based compensation for FY2025
“28 to 31”
Depreciation and amortization for FY2025
“450 to 440”
Interest expense, net for FY2025
“146 to 141”
Provision for income taxes for FY2025
“135 to 157”
Projected Adjusted EBITDA for FY2025
“$1,150 to $1,210”
Projected net cash from operating activities for FY2025
“$775 to $865”
Additions to property, plant and equipment for FY2025
“(370) to (400)”
Cash investment in Phoenix Hub for FY2025
“15 to 15”
Proceeds from sale and disposal of fixed ass… for FY2025
“10 to 10”
Projected adjusted free cash flow for FY2025
“$430 to $490”
Exhibit 99.1 · full document
EXHIBIT 99.1 Press Release                                             Clean Harbors Announces Fourth-Quarter and Full-Year 2024 Financial Results • Posts 7% Increase in Q4 Revenues to $1.43 Billion; Full-Year Revenues of $5.89 Billion, Driven by 11% Growth in Environmental Services Segment • Generates Q4 Net Income of $84.0 Million, or EPS of $1.55; Full-Year Net Income of $402.3 Million, or EPS of $7.42 • Achieves Q4 Adjusted EBITDA of $257.2 Million; Full-Year Adjusted EBITDA of $1.12 Billion • Commercially Launches State-of-the-Art Incinerator in Kimball, Nebraska • Delivers Full-Year Net Cash from Operating Activities of $777.8 Million and Adjusted Free Cash Flow of $357.9 Million • Provides Full-Year 2025 Adjusted EBITDA and Adjusted Free Cash Flow Guidance NORWELL, Mass. – February 19, 2025 – Clean Harbors, Inc. (“Clean Harbors” or the “Company”) (NYSE: CLH), the leading provider of environmental and industrial services throughout North America, today announced financial results for the fourth quarter and year ended December 31, 2024. “Our fourth-quarter results were in line with our expectations as our Environmental Services (ES) segment capped a record 2024 with a robust performance, including the 11 th consecutive quarter of year-over-year margin growth,” said Mike Battles, Co-Chief Executive Officer. “The segment benefited from steady demand, strong waste collection volumes, a healthy flow of project work and favorable pricing. For the full year the segment saw 11% top-line growth and annual Adjusted EBITDA margin exceeded 25%. We maintained a strong focus on safety and continuous improvement in the quarter, which contributed to a Total Recordable Incident Rate (TRIR) that enabled us to surpass our 2024 goal.” Fourth-Quarter 2024 Results Revenues grew 7% to $1.43 billion, compared with $1.34 billion in the same period of 2023. Income from operations was $137.0 million, compared with $147.3 million in the fourth quarter of 2023. Net income was $84.0 million, or $1.55 per diluted share, compared with $98.3 million, or $1.81 per diluted share, for the same period in 2023. Adjusted EBITDA (see description and reconciliation below) was $257.2 million, compared with $254.9 million in the same period of 2023. Clean Harbors • 42 Longwater Drive • PO Box 9149 • Norwell, Massachusetts 02061-9149 • 800.282.0058 • www.cleanharbors.com Q4 2024 Segment Review “Our ES segment achieved a 9% growth in revenue and 11% growth in Adjusted EBITDA,” said Eric Gerstenberg, Co-Chief Executive Officer. “Our Adjusted EBITDA margin in the segment increased by 50 basis points. Top-line growth in the segment was again led by our Field Services operations. Field Services revenue increased 47% from the prior-year period, reflecting the HEPACO acquisition and healthy organic growth in our legacy business. Technical Services revenue grew 8% on strength in our network. Incineration utilization was an outstanding 94% for the quarter, up from 85% in the same period a year ago. Safety-Kleen Environmental Services delivered 6% revenue growth in the ES segment.” “Results in our Safety-Kleen Sustainability Solutions (SKSS) segment reflected ongoing challenges in the U.S. base oil and lubricants market, as revenues declined 5% and profitability was down from the same period in 2023,” said Battles. “In response to the weakening market conditions and pricing pressure, we took aggressive action in mid-November by shifting customers to a charge-for-oil (CFO) position. These actions, along with cost-cutting initiatives, were designed to help offset the weaker pricing conditions that have persisted.” 2024 Financial Results Revenues for 2024 increased 9% to $5.89 billion compared with $5.41 billion in 2023. Income from operations increased 9% to $670.2 million compared with $612.4 million in 2023. Net income was $402.3 million, or $7.42 per diluted share, compared with net income of $377.9 million, or $6.95 per diluted share for 2023. (See reconciliation table below). Adjusted EBITDA (see description below) grew 10% to $1.12 billion from $1.01 billion in 2023. The Company generated adjusted free cash flow (see description and reconciliation below) of $357.9 million in 2024, compared with $321.9 million in 2023. The increase is attributable to greater earnings and some improvements in working capital management which offset higher net capital expenditures. “2024 was another exceptional year for the Company, particularly in our ES segment where we saw the continuation of a multi-year profitable growth trend and record financial performance,” Gerstenberg said. “Adjusted EBITDA margin in the ES segment expanded by 90 basis points to 25.3% on the strength of 11% revenue growth combined with a 15% increase in Adjusted EBITDA. Beyond our financial performance, we achieved significant operational milestones in 2024, including: • Achievement of a TRIR of 0.65, • Completion and commercial launch of our Kimball, Nebraska incinerator, • Acquisitions of HEPACO and Noble Oil, • Workforce growth and improved retention by lowering turnover by 250 basis points, • Introduction of our Total PFAS Solution, • Expansion of our Baltimore Hub, • Partnership with Castrol for its MoreCircular offering, and • More than 20,000 emergency response events. These developments illustrate our strategic execution and underscore our commitment to safety, growth, operational efficiency and market responsiveness.” Clean Harbors • 42 Longwater Drive • PO Box 9149 • Norwell, Massachusetts 02061-9149 • 800.282.0058 • www.cleanharbors.com Business Outlook and Financial Guidance “We expect a year of profitable growth in 2025, led by our ES segment,” Gerstenberg said. “A healthy backlog of waste streams across our disposal and recycling network is supported by favorable underlying trends expected in U.S. manufacturing, infrastructure spending and regulations, particularly as it relates to PFAS. We also continue to see a robust pipeline of remediation and waste projects as we move into the year. The commercial ramp up of our Nebraska incinerator is underway and our network is currently operating at a high level, efficiently and safely moving waste and utilizing all disposal assets. Our outlook for Field Services is decidedly positive given the early returns on the HEPACO transaction and the anticipated need for our comprehensive ER capabilities. We anticipate a return to growth in our Industrial Services business this year after a slower 2024, while SK Environmental Services should continue to drive record waste volumes into our network. “Within SKSS, our focus will remain on actively managing our cost structure, particularly waste oil collection costs. In terms of growth strategies, we are directing our energies into areas such as our Castrol partnership, Group III production, blended sales and opportunities to capitalize on the sustainable products we offer.” Battles concluded, “Overall, we believe we have the ideal strategies in place to deliver a great financial performance in 2025. In addition to increasing Adjusted EBITDA and adjusted free cash flow, we anticipate continued Adjusted EBITDA margin improvement based on our pricing, cost reduction and productivity initiatives.” In the first quarter of 2025, Clean Harbors expects Adjusted EBITDA to grow 4%-6% year-over-year in its ES segment and be flat on a consolidated basis. For full-year 2025, Clean Harbors expects: • Adjusted EBITDA in the range of $1.15 billion to $1.21 billion, or a midpoint of $1.18 billion, which represents 6% growth year-over-year. This Adjusted EBITDA range is based on anticipated GAAP net income in the range of $376 million to $427 million. • Adjusted free cash flow in the range of $430 million to $490 million, or a midpoint of $460 million. This range is based on anticipated net cash from operating activities in the range of $775 million to $865 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 measurement 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 because the Company’s management routinely evaluates the performance of its businesses based upon levels of Adjusted EBITDA. The Company defines Adjusted EBITDA as described in the following reconciliation showing the differences between reported net Clean Harbors • 42 Longwater Drive • PO Box 9149 • Norwell, Massachusetts 02061-9149 • 800.282.0058 • www.cleanharbors.com income and Adjusted EBITDA for the three and twelve months ended December 31, 2024 and 2023 (in thousands, except percentages): For the Three Months Ended For the Twelve Months Ended December 31, 2024 December 31, 2023 December 31, 2024 December 31, 2023 Net income $ 83,974  $ 98,349  $ 402,299  $ 377,856  Accretion of environmental liabilities 3,317  3,386  13,456  13,667  Stock-based compensation 7,291  5,894  27,981  20,703  Depreciation and amortization 105,290  98,336  400,922  365,761  Kimball startup costs 4,343  —  4,343  —  Other (income) expense, net (977) (3,148) 1,454  (2,315) Loss on early extinguishment of debt 371  518  371  2,880  Interest expense, net of interest income 34,197  28,195  134,964  108,595  Provision for income taxes 19,403  23,379  131,144  125,423  Adjusted EBITDA $ 257,209  $ 254,909  $ 1,116,934  $ 1,012,570  Adjusted EBITDA Margin 18.0  % 19.0  % 19.0  % 18.7  % Adjusted Free Cash Flow Reconciliation Clean Harbors reports adjusted free cash flow, a non-GAAP measure, which it considers to be a measurement of liquidity that provides useful information to investors about its ability to generate cash. The Company defines adjusted free cash flow as net cash from operating activities less additions to property, plant and equipment plus proceeds from sale and disposal of fixed assets. When necessary, the Company adjusts for the cash impact of items derived from non-operating activities. 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 the Company’s measurement 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 for the three and twelve months ended December 31, 2024 and 2023 (in thousands): For the Three Months Ended For the Twelve Months Ended December 31, 2024 December 31, 2023 December 31, 2024 December 31, 2023 Adjusted free cash flow Net cash from operating activities $ 303,938  $ 278,860  $ 777,771  $ 734,552  Additions to property, plant and equipment (62,415) (110,394) (432,241) (422,300) Proceeds from sale and disposal of fixed assets 2,746  4,521  9,099  9,650  Kimball startup costs 3,253  —  3,253  —  Adjusted free cash flow $ 247,522  $ 172,987  $ 357,882  $ 321,902  Clean Harbors • 42 Longwater Drive • PO Box 9149 • Norwell, Massachusetts 02061-9149 • 800.282.0058 • www.cleanharbors.com Adjusted EBITDA Guidance Reconciliation An itemized reconciliation between projected GAAP net income and projected Adjusted EBITDA is as follows (in millions): For the Year Ending December 31, 2025 Projected GAAP net income $376 to $427 Adjustments: Accretion of environmental liabilities 15 to 14 Stock-based compensation 28 to 31 Depreciation and amortization 450 to 440 Interest expense, net 146 to 141 Provision for income taxes 135 to 157 Projected Adjusted EBITDA $1,150 to $1,210 Adjusted Free Cash Flow Guidance Reconciliation An itemized reconciliation between projected GAAP net cash from operating activities and projected adjusted free cash flow is as follows (in millions). Starting in 2025, the Company is excluding significant one-time growth investments, which the Company expects to realize future long-term benefits from, as they are not indicative of free cash flow generation for the current period. For the Year Ending December 31, 2025 Projected net cash from operating activities $775 to $865 Additions to property, plant and equipment (370) to (400) Cash investment in Phoenix Hub 15 to 15 Proceeds from sale and disposal of fixed assets 10 to 10 Projected adjusted free cash flow $430 to $490 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 877.709.8155 or 201.689.8881 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. Clean Harbors • 42 Longwater Drive • PO Box 9149 • Norwell, Massachusetts 02061-9149 • 800.282.0058 • www.cleanharbors.com About Clean Harbors Clean Harbors (NYSE: CLH) is North America’s leading provider of environmental and industrial services. The Company serves a diverse customer base, including a majority of Fortune 500 companies. Its customer base spans a number of industries, including chemical, manufacturing and refining, 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 a leading provider of parts washers and environmental services to commercial, industrial and automotive customers, as well as North America’s largest re-refiner and recycler of used oil. Founded in 1980 and based in Massachusetts, Clean Harbors operates in the United States, Canada, Mexico, Puerto Rico and India. 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,” “seeks,” “will,” “should,” “estimates,” “projects,” “may,” “likely,” “potential,” “outlook” or similar expressions. Such statements may include, but are not limited to, statements about the Company’s future financial and operating results, plans, strategy, objectives and goals, cost management initiatives, pricing and productivity initiatives, contingent liabilities, liquidity, business and market conditions, trends, customer demand, acquisitions, growth opportunities, expectations, challenges and other statements that are not historical facts. Such statements are based upon the beliefs and expectations of Clean Harbors’ management as of the date of this press release 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 reports on Form 10-K and Form 10-Q. Forward-looking statements are neither historical facts nor assurances of future performance. 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. Contacts: Eric J. Dugas Jim Buckley EVP and Chief Financial Officer SVP Investor Relations Clean Harbors, Inc. Clean Harbors, Inc. 781.792.5100 781.792.5100 InvestorRelations@cleanharbors.com Buckley.James@cleanharbors.com Clean Harbors • 42 Longwater Drive • PO Box 9149 • Norwell, Massachusetts 02061-9149 • 800.282.0058 • www.cleanharbors.com CLEAN HARBORS, INC. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts)   For the Three Months Ended For the Twelve Months Ended December 31, 2024 December 31, 2023 December 31, 2024 December 31, 2023 Revenues $ 1,431,116  $ 1,338,169  $ 5,889,952  $ 5,409,152  Cost of revenues: 1,003,502  923,147  4,065,713  3,746,124  Selling, general and administrative expenses 182,039  166,007  739,629  671,161  Accretion of environmental liabilities 3,317  3,386  13,456  13,667  Depreciation and amortization 105,290  98,336  400,922  365,761  Income from operations 136,968  147,293  670,232  612,439  Other income (expense), net 977  3,148  (1,454) 2,315  Loss on early extinguishment of debt (371) (518) (371) (2,880) Interest expense, net (34,197) (28,195) (134,964) (108,595) Income before provision for income taxes 103,377  121,728  533,443  503,279  Provision for income taxes 19,403  23,379  131,144  125,423  Net income $ 83,974  $ 98,349  $ 402,299  $ 377,856  Earnings per share:     Basic $ 1.56  $ 1.82  $ 7.46  $ 6.99  Diluted $ 1.55  $ 1.81  $ 7.42  $ 6.95  Shares used to compute earnings per share - Basic 53,857 53,995 53,902 54,071 Shares used to compute earnings per share - Diluted 54,168 54,259 54,199 54,382 Clean Harbors • 42 Longwater Drive • PO Box 9149 • Norwell, Massachusetts 02061-9149 • 800.282.0058 • www.cleanharbors.com CLEAN HARBORS, INC. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) December 31, 2024 December 31, 2023 Current assets:     Cash and cash equivalents $ 687,192  $ 444,698  Short-term marketable securities 102,634  106,101  Accounts receivable, net 1,015,357  983,111  Unbilled accounts receivable 162,215  107,859  Inventories and supplies 384,657  327,511  Prepaid expenses and other current assets 81,741  82,939  Total current assets 2,433,796  2,052,219  Property, plant and equipment, net 2,447,941  2,193,318  Other assets: Operating lease right-of-use assets 250,853  187,060  Goodwill 1,477,199  1,287,736  Permits and other intangibles, net 701,987  602,797  Other long-term assets 65,502  59,739  Total other assets 2,495,541  2,137,332  Total assets $ 7,377,278  $ 6,382,869  Current liabilities: Current portion of long-term debt $ 15,102  $ 10,000  Accounts payable 487,286  451,806  Deferred revenue 88,545  95,230  Accrued expenses and other current liabilities 419,445  397,157  Current portion of closure, post-closure and remedial liabilities 20,625  26,914  Current portion of operating lease liabilities 71,663  56,430  Total current liabilities 1,102,666  1,037,537  Other liabilities:   Closure and post-closure liabilities, less current portion 119,484  105,044  Remedial liabilities, less current portion 101,424  97,885  Long-term debt, less current portion 2,771,117  2,291,717  Operating lease liabilities, less current portion 182,883  131,743  Deferred tax liabilities 363,623  353,107  Other long-term liabilities 162,552  118,330  Total other liabilities 3,701,083  3,097,826         Total stockholders’ equity, net 2,573,529  2,247,506         Total liabilities and stockholders’ equity $ 7,377,278  $ 6,382,869  Clean Harbors • 42 Longwater Drive • PO Box 9149 • Norwell, Massachusetts 02061-9149 • 800.282.0058 • www.cleanharbors.com CLEAN HARBORS, INC. AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) For the Year Ended December 31, 2024 December 31, 2023 Cash flows from operating activities: Net income $ 402,299  $ 377,856  Adjustments to reconcile net income to net cash from operating activities: Depreciation and amortization 400,922  365,761  Allowance for doubtful accounts 8,129  5,956  Amortization of deferred financing costs and debt discount 6,321  5,309  Accretion of environmental liabilities 13,456  13,667  Changes in environmental liability estimates 4,139  4,828  Deferred income taxes 18,437  12,685  Other expense (income), net 1,454  (2,315) Stock-based compensation 27,981  20,703  Loss on early extinguishment of debt 371  2,880  Environmental expenditures (27,522) (28,960) Changes in assets and liabilities, net of acquisitions: Accounts receivable and unbilled accounts receivable (28,822) 2,453  Inventories and supplies (49,588) (4,312) Other current and non-current assets (57,220) (22,645) Accounts payable 12,327  (27,425) Other current and long-term liabilities 45,087  8,111  Net cash from operating activities 777,771  734,552  Cash flows used in investing activities: Additions to property, plant and equipment (432,241) (422,300) Proceeds from sale and disposal of fixed assets 9,099  9,650  Acquisitions, net of cash acquired (478,011) (119,596) Proceeds from sale of business, net of transaction costs 750  750  Additions to intangible assets including costs to obtain or renew permits (9,607) (2,649) Purchases of available-for-sale securities (117,861) (158,264) Proceeds from sale of available-for-sale securities 124,197  117,359  Net cash used in investing activities (903,674) (575,050) Cash flows from (used in) financing activities: Change in uncashed checks (1,473) 2,759  Tax payments related to withholdings on vested restricted stock (13,759) (13,838) Repurchases of common stock (55,178) (51,164) Deferred financing costs paid (8,954) (6,736) Payments on finance leases (30,886) (15,937) Proceeds from employee stock purchase plan 3,009  —  Principal payments on debt (15,102) (623,975) Proceeds from issuance of debt, net of discount 499,375  500,000  Borrowing from revolving credit facility —  114,000  Payment on revolving credit facility —  (114,000) Net cash from (used in) financing activities 377,032  (208,891) Effect of exchange rate change on cash (8,635) 1,484  Increase (decrease) in cash and cash equivalents 242,494  (47,905) Cash and cash equivalents, beginning of year 444,698  492,603  Cash and cash equivalents, end of year $ 687,192  $ 444,698  Clean Harbors • 42 Longwater Drive • PO Box 9149 • Norwell, Massachusetts 02061-9149 • 800.282.0058 • www.cleanharbors.com Supplemental information: Cash payments for interest and income taxes: Interest paid $ 153,059  $ 114,560  Income taxes paid, net of refunds 130,606  132,314  Non-cash investing activities: Property, plant and equipment accrued 43,750  52,376  Supplemental Segment Data (in thousands) For the Three Months Ended Revenue December 31, 2024 December 31, 2023 Third Party Revenues Intersegment Revenues (Expenses), net Direct Revenues Third Party Revenues Intersegment Revenues (Expenses), net Direct Revenues Environmental Services $ 1,214,098  $ 11,569  $ 1,225,667  $ 1,112,166  $ 10,136  $ 1,122,302  Safety-Kleen Sustainability Solutions 216,908  (11,569) 205,339  225,891  (10,136) 215,755  Corporate Items 110  —  110  112  —  112  Total $ 1,431,116  $ —  $ 1,431,116  $ 1,338,169  $ —  $ 1,338,169  For the Twelve Months Ended Revenue December 31, 2024 December 31, 2023 Third Party Revenues Intersegment Revenues (Expenses), net Direct Revenues Third Party Revenues Intersegment Revenues (Expenses), net Direct Revenues Environmental Services $ 4,960,325  $ 44,422  $ 5,004,747  $ 4,469,909  $ 41,533  $ 4,511,442  Safety-Kleen Sustainability Solutions 929,220  (44,422) 884,798  938,796  (41,533) 897,263  Corporate Items 407  —  407  447  —  447  Total $ 5,889,952  $ —  $ 5,889,952  $ 5,409,152  $ —  $ 5,409,152  For the Three Months Ended For the Twelve Months Ended Adjusted EBITDA December 31, 2024 December 31, 2023 December 31, 2024 December 31, 2023 Environmental Services $ 310,570  $ 278,659  $ 1,267,462  $ 1,101,608  Safety-Kleen Sustainability Solutions 24,604  46,849  147,006  172,873  Corporate Items (77,965) (70,599) (297,534) (261,911) Total $ 257,209  $ 254,909  $ 1,116,934  $ 1,012,570  Clean Harbors • 42 Longwater Drive • PO Box 9149 • Norwell, Massachusetts 02061-9149 • 800.282.0058 • www.cleanharbors.com
the item shown at left
other guidance in this release
Text is the filed exhibit, verbatim.