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
fourth quarter and full year ended December 31, 2006. Clean Harbors
increased revenues by approximately 20 percent to $231.8 million in
the fourth quarter of 2006 from $193.7 million in the fourth
quarter of 2005. Income from operations grew to $19.8 million from
$14.3 million for the fourth quarter of 2005. EBITDA grew by
approximately 31 percent to $31.4 million from $23.9 million for
the fourth quarter of 2005. See below for a description of EBITDA
and a reconciliation to GAAP results. Net income attributable to
common shareholders rose to $11.4 million, or $0.56 per diluted
share, from $7.9 million, or $0.43 per diluted share, in the same
period of 2005. Comments on the Fourth Quarter �The fourth quarter
of 2006 was a strong conclusion to the best year in Clean Harbors�
history,� said Alan S. McKim, Chairman and Chief Executive Officer.
�With solid demand across our business lines and good weather, we
delivered quarterly revenue in excess of $200 million for the
second consecutive quarter, exclusive of any revenue attributed to
Teris, which we acquired in August.� �Organic growth in the fourth
quarter was primarily driven by our Technical Services business,
which continued to perform large facilities projects,� McKim said.
�Incineration volumes were strong, and we achieved utilization of
91 percent, despite the addition of significant capacity earlier in
the year. Reflecting increased activity in both the United States
and Canada, total landfill volumes were nearly 30 percent higher
than in the same period in 2005.� �In Site Services, we continued
our steady geographic expansion with the opening of another branch
in southern Florida,� said McKim. �We did not have any major
emergency response events in the quarter, unlike the fourth quarter
of 2005 when we posted more than $17 million of higher margin
revenue related to post-hurricane clean-up projects. Consequently,
our Site Services margins were down, even though we generated a
steady stream of small scale projects that produced approximately
$7 million in revenue in the quarter.� Comments on Full-Year 2006
Revenues for the year ended December 31, 2006 increased nearly 17
percent to $829.8 million, compared with $711.2 million for
full-year 2005. Income from operations for full-year 2006 increased
45 percent to $74.4 million versus $51.3 million in the prior year.
EBITDA (see description below) for 2006 increased 33 percent to
$119.9 million from $90.3 million for 2005. The Company generated
net income attributable to common shareholders of $46.4 million, or
$2.26 per diluted share, for the full-year 2006. This compares with
a 2005 net income attributable to common shareholders of $25.3
million, or $1.45 per diluted share. �The year 2006 was outstanding
for Clean Harbors both financially and operationally,� McKim said.
�We added substantial incineration capacity, constructed several
secure landfill cells, upgraded numerous facilities, expanded our
transportation fleet, and exceeded our Health, Safety &
Compliance targets. In support of our successful strategy of
introducing the Clean Harbors brand into new markets and expanding
our footprint, we opened six new Site Services locations in 2006.
These initiatives enabled us to post the largest organic increase
in revenues in the Company�s history.� �At the same time, we
successfully completed the Teris acquisition, which will broaden
our service offerings and improve our ability to service our
customers,� said McKim. �Although Teris is still ramping up, it
turned in an exemplary month in December. We also met our goal of
Teris being accretive in the fourth quarter and we expect to see
continued improvement throughout 2007.� �We successfully drove
annual top-line growth, while continuing to closely manage our
operating costs and environmental liabilities, as well as improve
our operating efficiencies,� McKim said. �As a result, net income
grew substantially from 2005 and EBITDA grew by approximately 33
percent.� Non-GAAP Fourth-Quarter and Full-Year 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 outstanding credit agreement, as
described in the following reconciliation showing the differences
between reported net income and EBITDA for 2006 and 2005 (in
thousands): For the three months ended: For the year ended:
December 31, December 31, December 31, December 31, � 2006� � 2005�
� 2006� � 2005� � Net income $ 11,493� $ 7,952� $ 46,675� $ 25,621�
Accretion of environmental liabilities 2,587� 2,501� 10,220�
10,384� Depreciation and amortization 9,043� 7,116� 35,339� 28,633�
Loss on early extinguishment of debt 239� -� 8,529� -� Interest
expense, net 3,144� 4,963� 12,447� 22,754� Provision for income
taxes 4,760� 1,595� 6,339� 3,495� Other (income) expense 174� (184)
447� (611) Equity interest in joint venture � (50) � -� � (61) � -�
EBITDA $ 31,390� $ 23,943� $ 119,935� $ 90,276� Business Outlook
and Financial Guidance �We expect 2007 to be another year of solid
demand for Clean Harbors services,� McKim said. �Volumes at our
incinerators are strong, utilization rates are high, and we
anticipate that we will continue to benefit from increased
outsourcing trends from customers with captive incinerators. We
have already taken several strategic steps to position the Company
for further growth in 2007. In January, we acquired the remaining
50 percent interest of Teris� joint venture in Puerto Rico, Ensco
Caribe. This represents an exciting opportunity to provide our full
range of environmental services to businesses across Puerto Rico
and the Caribbean under our new subsidiary, Clean Harbors Caribe
Inc. We also announced a price increase across all service lines
effective March 15, which should counter rising operating costs and
support our growth in the second quarter and beyond.� The first
quarter is traditionally the slowest quarter of the year for Clean
Harbors due to the effect of weather on the Company�s plants and
customers� operations. For the first quarter of 2007, the Company
expects revenue in the range of $200 million to $205 million. The
Company expects to generate EBITDA for the first quarter of 2007 in
the range of $22 million to $25 million. For 2007, the Company
expects to increase revenues by 8 percent to 9 percent, and achieve
EBITDA growth in the range of 12 percent to 13 percent. Conference
Call Information Clean Harbors will conduct a conference call for
investors to discuss the information contained in this press
release today, Wednesday, March 14, 2007 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 fourth-quarter and year-end 2006 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 800.395.0708 or 913.981.5560 (confirmation
code: 2469747) 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 49
waste management facilities, including nine landfills, six
incineration locations and six wastewater treatment centers, the
Company provides essential services to over 45,000 customers,
including more than 325 Fortune 500 companies, thousands of smaller
private entities and numerous federal, state and local 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 successfully integrate Teris� operations and
assets into its existing network of services and disposal
facilities; The Company�s ability to manage the significant
environmental liabilities that it assumed in connection with the
CSD and Teris 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 the Investor portal of the Company�s Web Page at
www.cleanharbors.com. CLEAN HARBORS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS Unaudited (in thousands
except per share amounts) � For the three months ended: Year ended:
December 31, December 31, December 31, December 31, � 2006� � 2005�
� 2006� � 2005� Revenues $ 231,849� $ 193,714� $ 829,809� $
711,170� Cost of revenues 165,907� 138,592� 584,835� 512,582�
Selling, general and administrative expenses 34,552� 31,179�
125,039� 108,312� Accretion of environmental liabilities 2,587�
2,501� 10,220� 10,384� Depreciation and amortization � 9,043� �
7,116� � 35,339� � 28,633� Income from operations 19,760� 14,326�
74,376� 51,259� Other income (expense) (174) 184� (447) 611� Loss
on early extinguishment of debt (239) -� (8,529) -� Interest
(expense), net � (3,144) � (4,963) � (12,447) � (22,754) Income
before provision for income taxes and equity interest in joint
venture 16,203� 9,547� 52,953� 29,116� Provision for income taxes
4,760� 1,595� 6,339� 3,495� Equity interest in joint venture � (50)
� -� � (61) � -� Net income 11,493� 7,952� 46,675� 25,621�
Redemption of Series C Preferred Stock, dividends on Series B and C
Preferred Stocks and accretion on Series C Preferred Stock � 69� �
69� � 276� � 279� Net income attributable to common shareholders $
11,424� $ 7,883� $ 46,399� $ 25,342� � Earnings per share: Basic
earnings attributable to common shareholders $ 0.58� $ 0.46� $
2.38� $ 1.62� Diluted earnings attributable to common shareholders
$ 0.56� $ 0.43� $ 2.26� $ 1.45� � Weighted average common shares
outstanding � 19,634� � 17,262� � 19,526� � 15,629� Weighted
average common shares outstanding plus potentially dilutive common
shares � 20,637� � 18,566� � 20,657� � 17,717� CLEAN HARBORS, INC.
AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ASSETS (in thousands)
� (Unaudited) December 31, December 31, � 2006� � 2005� Current
assets: Cash and cash equivalents $ 73,550� $ 132,449� Restricted
cash and cash equivalents -� 3,469� Marketable securities 10,240�
-� Accounts receivable, net 169,581� 147,659� Unbilled accounts
receivable 16,078� 7,049� Deferred costs 7,140� 4,937� Prepaid
expenses 9,301� 6,411� Supplies inventories 20,101� 12,723�
Deferred tax assets 9,238� 219� Income tax receivable 150� 1,462�
Properties held for sale � 7,440� � 7,670� Total current assets �
322,819� � 324,048� � Property, plant and equipment, net � 244,126�
� 178,524� � Other assets: Deferred financing costs 7,206� 9,508�
Goodwill 19,032� 19,032� Permits and other intangibles, net 65,743�
77,803� Investment in joint venture 2,208� -� Deferred tax assets
6,388� 1,715� Other � 3,286� � 3,734� � 103,863� � 111,792� Total
assets $ 670,808� $ 614,364� CLEAN HARBORS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS LIABILITIES AND STOCKHOLDERS� EQUITY
(in thousands) � (Unaudited) December 31, December 31, � 2006� �
2005� Current liabilities: Uncashed checks $ 11,083� $ 7,982�
Current portion of long-term debt -� 52,500� Current portion of
capital lease obligations 1,391� 1,893� Accounts payable 81,432�
71,372� Accrued disposal costs 3,058� 3,109� Deferred revenue
29,409� 21,784� Other accrued expenses 53,941� 49,779� Current
portion of closure, post-closure and remedial liabilities 13,707�
10,817� Income taxes payable � 4,333� � 4,458� Total current
liabilities � 198,354� � 223,694� Other liabilities: Closure and
post-closure liabilities, less current portion 23,520� 20,728�
Remedial liabilities, less current portion 136,173� 139,144�
Long-term obligations, less current maturities 120,522� 95,790�
Capital lease obligations, less current portion 2,648� 4,108� Other
long-term liabilities 15,609� 14,417� Accrued pension cost � 796� �
825� Total other liabilities � 299,268� � 275,012� Total
stockholders� equity, net � 173,186� � 115,658� Total liabilities
and stockholders� equity $ 670,808� $ 614,364�
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