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
first quarter ended March 31, 2006 and the signing of a definitive
agreement to acquire Teris L.L.C., an environmental services
company based in Dallas, Texas. For the first quarter of 2006,
Clean Harbors reported a 12 percent increase in revenue to $184.5
million from $165.0 million reported in the first quarter of 2005.
Income from operations rose 47% to $15.0 million from $10.2 million
in the first quarter of 2006. Net income attributable to common
stockholders was $2.7 million, or $0.14 per diluted share, for the
first quarter of 2006. This compares with $4.8 million, or $0.27
per diluted share, in the same period of 2005. Net income for the
first quarter of 2006 includes $557,000 in stock-based compensation
expense and the previously announced charge of approximately $8.3
million resulting from the redemption of $52.5 million of senior
secured notes in early January. EBITDA (see description below)
increased 24 percent to $24.8 million in the first quarter of 2006,
from $20.1 million for the quarter ended March 31, 2005. Comments
on the First Quarter "We continued to execute our growth strategy,
delivering another quarter of steady top- and bottom-line
improvements," stated Alan S. McKim, Chairman and Chief Executive
Officer. "We generated double digit revenue growth through a
combination of several factors. Our clean-up efforts in the Gulf
region contributed $13 million to first-quarter revenue. Our
projects business was strong and we benefited from favorable
weather conditions for much of the quarter, which improved overall
capacity utilization at our disposal facilities. In fact, our
landfills delivered the best first-quarter performance since we
acquired these facilities in late 2002." "We continue to make
steady progress in increasing our profitability," said McKim. "Our
results for the first quarter reflect the leverage that is inherent
in our business model. On a year-over-year basis, we improved our
operating margin to approximately 8% from 6% in the first quarter
of 2005. This considerable margin expansion was driven by higher
revenue and our ongoing cost cutting initiatives. We continue to
internalize transportation, reduce non-billable headcount and
better utilize our rail assets. In addition, this quarter was the
first full quarter in which we had our WIN software operating
platform fully installed throughout our U.S. and Canadian
operations." Agreement to Acquire Teris L.L.C. Clean Harbors also
announced today that it has entered into a definitive agreement to
acquire Teris L.L.C., an environmental services company based in
Dallas, Texas. Teris is an operator of an incineration facility
located in El Dorado, Arkansas and a Treatment, Storage and
Disposal facility located in Wilmington, California. For 2005,
Teris reported revenue of approximately $95 million. Teris
currently has more than 550 employees and several field locations.
Under the terms of the agreement, Clean Harbors will acquire all of
the membership interests in Teris for approximately $52.7 million
in cash. The seller is SITA U.S.A., Inc., a subsidiary of Suez
Environnement, S.A., a French corporation. "The acquisition of
Teris represents a good opportunity for Clean Harbors to better
serve our customers," said McKim. "Its operations are a natural
adjunct to our existing operations across North America. The
transaction is consistent with our acquisition strategy as it
provides us with an expanded customer base and affords us an
opportunity to cross-sell Clean Harbors' suite of services." "Teris
is focused on the drum and small container market, which will
complement our other service offerings," McKim said. "We believe
that by leveraging our extensive network of disposal facilities and
industry-leading systems, we will quickly achieve substantial cost
efficiencies and productivity gains. Based on the potential for
these synergies, we anticipate that this acquisition will be
accretive by year-end 2006." Clean Harbors plans to fund the
purchase price from existing cash and a term loan under its
existing credit agreement. The acquisition is subject to customary
closing conditions and is expected to close during the third
quarter of 2006. Non-GAAP First-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 first quarter of 2006 and 2005 (in
thousands): -0- *T For the three months ended: March 31, March 31,
2006 2005 --------- ---------- Net income $ 2,805 $ 4,841 Accretion
of environmental liabilities 2,510 2,634 Depreciation and
amortization 7,279 7,209 Loss on early extinguishment of debt 8,290
- Interest expense, net 3,173 5,961 Provision for income taxes 695
32 Other (income) expense 30 (619) --------- ---------- EBITDA $
24,782 $ 20,058 ========= ========== *T Business Outlook and
Financial Guidance "The outlook for Clean Harbors is positive,"
McKim said. "Our Site Services group has a healthy pipeline of
business and we remain on track to achieve our goal of opening 10
new offices in 2006. We are excited about the prospects for the
Teris acquisition and look forward to integrating the Teris
organization into the Clean Harbors family." McKim concluded, "Our
business model continues to generate strong cash flow that enables
us to pursue accretive acquisitions and invest in our business.
Throughout the remainder of 2006, we will focus on successfully
completing the acquisition of Teris and integrating its
operations." Based on its first-quarter results and current market
conditions, the Company currently expects to grow revenue in the
second quarter of 2006 by approximately 5 percent year-over-year to
a range of $182 million to $185 million. The Company expects to
generate EBITDA for the second quarter of 2006 in the range of $23
million to $25 million. Conference Call Information Clean Harbors
will conduct a conference call for investors to discuss the
information contained in this news release today at 9:00 a.m. (ET).
On the call, Chairman, President and Chief Executive Officer Alan
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 first-quarter webcast should visit the Investor Relations
section of the Company's website at www.cleanharbors.com. The live
conference call also can be accessed by dialing (888) 349-5690 or
(706) 643-3945 (conference ID: 7688763) 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,
Inc. Clean Harbors, Inc. is North America's leading provider of
environmental and hazardous waste management services. With an
unmatched infrastructure of 48 waste management facilities,
including nine landfills, five incineration locations and seven
wastewater treatment centers, the Company provides essential
services to over 45,000 customers, including more than 175 Fortune
500 companies, thousands of smaller private entities and numerous
federal, state and local governmental agencies. Headquartered in
Braintree, Massachusetts, Clean Harbors has more than 100 locations
strategically positioned throughout North America in 36 U.S.
states, six Canadian provinces, Mexico and Puerto Rico. For more
information, visit www.cleanharbors.com. 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. 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 close its announced acquisition of Teris
in a timely fashion, if at all, and successfully integrate its
operations and assets into its existing network of services and
disposal facilities; -- The Company's ability to manage the
significant environmental liabilities which it assumed in
connection with the CSD acquisition; -- 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 the Investor portal of
the Company's Web Page at www.cleanharbors.com. -0- *T CLEAN
HARBORS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF
OPERATIONS Unaudited (in thousands except per share amounts) For
the three months ended: March 31, March 31, 2006 2005 --------
-------- Revenues $184,495 $164,966 Cost of revenues 131,358
120,547 Selling, general and administrative expenses 28,355 24,361
Accretion of environmental liabilities 2,510 2,634 Depreciation and
amortization 7,279 7,209 -------- -------- Income from operations
14,993 10,215 Other income (expense) (30) 619 Loss on early
extinguishment of debt (8,290) - Interest (expense), net (3,173)
(5,961) -------- -------- Income before provision for income taxes
3,500 4,873 Provision for income taxes 695 32 -------- -------- Net
income 2,805 4,841 Redemption of Series C Preferred Stock,
dividends on Series B and C Preferred Stocks and accretion on
Series C Preferred Stock 69 70 -------- -------- Net income
attributable to common stockholders $ 2,736 $ 4,771 ========
======== Earnings per share: Basic income attributable to common
stockholders $ 0.14 $ 0.33 ======== ======== Diluted income
attributable to common stockholders $ 0.14 $ 0.27 ======== ========
Weighted average common shares outstanding 19,390 14,602 ========
======== Weighted average common shares outstanding plus
potentially dilutive common shares 20,509 18,072 ======== ========
CLEAN HARBORS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
ASSETS (in thousands) (Unaudited) March December 31, 31, 2006 2005
---------- -------- Current assets: Cash and cash equivalents $
34,129 $132,449 Restricted cash - 3,469 Marketable securities
43,500 - Accounts receivable, net 134,021 147,659 Unbilled accounts
receivable 7,763 7,049 Deferred costs 5,025 4,937 Prepaid expenses
7,246 6,411 Supplies inventories 12,690 12,723 Deferred tax assets
219 219 Income Tax Receivable 643 1,462 Properties held for sale
7,888 7,670 ---------- -------- Total current assets 253,124
324,048 ---------- -------- Property, plant and equipment, net
183,095 178,524 Other assets: Deferred financing costs 7,448 9,508
Goodwill 19,032 19,032 Permits and other intangibles, net 76,519
77,803 Deferred tax assets 759 1,715 Other 2,994 3,734 ----------
-------- 106,752 111,792 ---------- -------- Total assets $ 542,971
$614,364 ========== ======== CLEAN HARBORS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS LIABILITIES AND STOCKHOLDERS' EQUITY
(in thousands) (Unaudited) March December 31, 31, 2006 2005
---------- -------- Current liabilities: Uncashed checks $ 7,795 $
7,982 Current portion of long-term debt - 52,500 Current portion of
capital lease obligations 1,747 1,893 Accounts payable 61,472
71,372 Accrued disposal costs 3,328 3,109 Deferred revenue 22,151
21,784 Other accrued expenses 38,687 49,779 Current portion of
closure, post-closure and remedial liabilities 13,126 10,817 Income
taxes payable 2,612 4,458 ---------- -------- Total current
liabilities 150,918 223,694 ---------- -------- Other liabilities:
Closure and post-closure liabilities, less current portion 20,501
20,728 Remedial liabilities, less current portion 136,870 139,144
Long-term obligations, less current maturities 96,412 95,790
Capital lease obligations, less current portion 3,623 4,108 Other
long-term liabilities 14,637 14,417 Accrued pension cost 725 825
---------- -------- Total other liabilities 272,768 275,012
---------- -------- Total stockholders' equity, net 119,285 115,658
---------- -------- Total liabilities and stockholders' equity $
542,971 $614,364 ========== ======== *T
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