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
second quarter and six months ended June 30, 2006. For the second
quarter of 2006, Clean Harbors reported a $25.7 million increase in
revenue to $199.6 million, up 15 percent from $173.9 million
reported in the second quarter of 2005. Income from operations rose
24% to $17.8 million from $14.4 million in the second quarter of
2005. Net income attributable to common stockholders was $11.3
million, or $0.55 per diluted share, for the second quarter of
2006. This compares with $7.3 million, or $0.43 per diluted share,
in the same period of 2005. EBITDA (see description below)
increased 17 percent to $28.3 million in the second quarter of
2006, from $24.2 million for the quarter ended June 30, 2005.
Comments on the Second Quarter "Clean Harbors delivered a
record-setting performance in the second quarter," stated Alan S.
McKim, Chairman and Chief Executive Officer. "We surpassed our
revenue and EBITDA guidance through a combination of targeted
growth initiatives and a continued focus on cost containment. Our
top-line grew by 15% year-over-year as a result of steady execution
in both our Technical Services and Site Services businesses. We
increased our EBITDA margin to 14.2 percent in the quarter despite
one-time expenses related to the move of our corporate headquarters
to Norwell and costs associated with the proposed acquisition of
Teris L.L.C." "Within Technical Services, our ability to win
large-scale facility projects drove substantial volumes to our
disposal facilities," McKim said. "Utilization at our incineration
facilities, which includes the expansion we recently implemented at
our Deer Park location, was greater than 90 percent. Our momentum
in the quarter was even more evident in our landfill business,
where volumes increased more than 75% from the same period in
2005." "Site Services also was a key contributor in the quarter,"
McKim said. "Along with a steady performance from our branch office
locations, we secured approximately $3 million from several
small-scale emergency response projects, and $800,000 from residual
emergency response work related to the Gulf Coast hurricanes."
Non-GAAP Second-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 second quarter and first six months of 2006 and
2005 (in thousands): -0- *T For the For the three months six months
ended: ended: June 30, June 30, June 30, June 30, 2006 2005 2006
2005 ------------------------------------- Net income (loss)
$11,372 $ 7,371 $14,777 $12,212 Accretion of environmental
liabilities 2,543 2,616 5,053 5,250 Depreciation and amortization
7,954 7,145 15,233 14,354 Loss on early extinguishment of debt - -
8,290 - Interest expense, net 2,876 5,946 6,049 11,907 Provision
for income taxes 3,469 981 4,164 1,013 Other (income) expense 132
109 162 (510) ------------------------------------ EBITDA $28,346
$24,168 $53,128 $44,226 ==================================== *T
Business Outlook and Financial Guidance "We enter the second half
of 2006 with significant momentum in several areas of our
business," McKim said. "We have a healthy pipeline of large-scale
projects to feed our disposal facilities. Within Site Services, the
strength of the Clean Harbors brand continues to grow based on our
responsiveness, reliability and extensive portfolio of service
offerings. We expect to add two branch locations in the third
quarter to support our organic growth. On the cost side, we will
continue to pursue our ongoing cost-reduction initiatives,
including our focus on internalizing transportation and utilizing
our rail assets." Based on its second-quarter results and current
market conditions, the Company expects revenues for the third
quarter of 2006 to be in a range of $190 million to $195 million,
and EBITDA to be in the range of $28 million to $30 million. This
guidance does not include any contribution from the proposed Teris
acquisition. Teris Acquisition In early May, Clean Harbors
announced it had signed a definitive agreement to acquire Teris
L.L.C., an environmental services company based in Dallas, Texas
with an incinerator in El Dorado, Arkansas and a transportation,
storage and disposal facility in Wilmington, California. Under the
terms of the agreement, Clean Harbors will acquire all of the
membership interests in Teris for approximately $52.7 million in
cash from SITA U.S.A., Inc., a subsidiary of Suez Environnement,
S.A., a French corporation. 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 Clean Harbors currently expects the
acquisition to close during the third quarter. "Following the
closing of the transaction, we will immediately begin the
integration process, which we expect to complete by year-end,"
concluded McKim. "We are excited about this acquisition as Teris'
operations are an ideal complement to our existing network of
disposal facilities." Conference Call Information Clean Harbors
will conduct a conference call for investors to discuss the
information contained in this news release today, Tuesday, August 8
at 9:00 a.m. (ET). Investors who want to hear a webcast of the call
should log onto www.cleanharbors.com and select "Investor
Relations." In addition, if you are unable to listen to the live
webcast, the call will be archived on the investor section of the
website. Those who wish to listen to the second-quarter conference
call 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 (800) 289-0494 or (913) 981-5520
(confirmation code: 8892444) 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 more
than 45,000 customers, comprising more than 175 Fortune 500
companies, thousands of smaller private entities and numerous
governmental agencies. 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 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 For the six months ended: ended: June 30, June 30,
June 30, June 30, 2006 2005 2006 2005 --------- --------- ---------
--------- Revenues $199,562 $173,910 $384,057 $338,876 Cost of
revenues 135,964 124,434 267,322 244,981 Selling, general and
administrative expenses 35,252 25,308 63,607 49,669 Accretion of
environmental liabilities 2,543 2,616 5,053 5,250 Depreciation and
amortization 7,954 7,145 15,233 14,354 --------- ---------
--------- --------- Income from operations 17,849 14,407 32,842
24,622 Other income (expense) (132) (109) (162) 510 Loss on early
extinguishment of debt (8,290) Interest (expense), net (2,876)
(5,946) (6,049) (11,907) --------- --------- --------- ---------
Income before provision for income taxes 14,841 8,352 18,341 13,225
Provision for income taxes 3,469 981 4,164 1,013 ---------
--------- --------- --------- Net income 11,372 7,371 14,177 12,212
Redemption of Series C Preferred Stock, dividends on Series B and C
Preferred Stocks and accretion on Series C Preferred Stock 69 70
138 140 --------- --------- --------- --------- Net income
attributable to common stockholders $ 11,303 $ 7,301 $ 14,039 $
12,072 ========= ========= ========= ========= Earnings per share:
Basic income attributable to common stockholders $ 0.58 $ 0.48 $
0.72 $ 0.81 ========= ========= ========= ========= Diluted income
attributable to common stockholders $ 0.55 $ 0.43 $ 0.69 $ 0.71
========= ========= ========= ========= Weighted average common
shares outstanding 19,495 15,213 19,441 14,913 ========= =========
========= ========= Weighted average common shares outstanding plus
potentially dilutive common shares 20,549 17,253 20,518 17,142
========= ========= ========= ========= CLEAN HARBORS, INC. AND
SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ASSETS (in thousands)
(Unaudited) June 30, December 31, 2006 2005 ------------
------------ Current assets: Cash and cash equivalents $ 79,918 $
132,449 Restricted cash - 3,469 Marketable securities 11,750 -
Accounts receivable, net 145,197 147,659 Unbilled accounts
receivable 9,649 7,049 Deferred costs 5,267 4,937 Prepaid expenses
and other current assets 8,975 6,411 Supplies inventories 12,585
12,723 Deferred tax assets 229 219 Income tax receivable 673 1,462
Properties held for sale 8,236 7,670 ------------ ------------
Total current assets 282,479 324,048 ------------ ------------
Property, plant and equipment, net 188,884 178,524 ------------
------------ Other assets: Deferred financing costs 7,098 9,508
Goodwill 19,032 19,032 Permits and other intangibles, net 76,970
77,803 Deferred tax assets 794 1,715 Other 3,022 3,734 ------------
------------ 106,916 111,792 ------------ ------------ Total assets
$ 578,279 $ 614,364 ============ ============ CLEAN HARBORS, INC.
AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS LIABILITIES AND
STOCKHOLDERS' EQUITY (in thousands) (Unaudited) June 30, December
31, 2006 2005 ------------ ------------ Current liabilities:
Uncashed checks $ 3,219 $ 7,982 Current portion of long-term debt -
52,500 Current portion of capital lease obligations 1,733 1,893
Accounts payable 74,295 71,372 Accrued disposal costs 2,990 3,109
Deferred revenue 23,226 21,784 Other accrued expenses 44,854 49,779
Current portion of closure, post- closure and remedial liabilities
14,266 10,817 Income taxes payable 3,447 4,458 ------------
------------ Total current liabilities 168,030 223,694 ------------
------------ Other liabilities: Closure and post-closure
liabilities, less current portion 21,019 20,728 Remedial
liabilities, less current portion 136,840 139,144 Long-term
obligations, less current maturities 96,432 95,790 Capital lease
obligations, less current portion 3,234 4,108 Other long-term
liabilities 15,628 14,417 Accrued pension cost 685 825 ------------
------------ Total other liabilities 273,838 275,012 ------------
------------ Total stockholders' equity, net 136,411 115,658
------------ ------------ Total liabilities and stockholders'
equity $ 578,279 $ 614,364 ============ ============ *T
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