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, 2007. For the first quarter of 2007,
Clean Harbors reported an 11 percent increase in revenue to $205.0
million from $184.5 million reported in the first quarter of 2006.
Income from operations was $10.7 million compared to $15.0 million
in the first quarter of 2006, a 29 percent decline. Net income
attributable to common stockholders rose 25 percent to $3.4
million, or $0.17 per diluted share, for the first quarter of 2007
from $2.7 million, or $0.14 per diluted share, in the same period
of 2006. The Company�s provision for income taxes was $4.0 million
for the first quarter of 2007, resulting in an effective tax rate
of 53 percent. The provision for income taxes included $1.2
million, or $0.06 per diluted share, related to the Company�s
adoption of Financial Accounting Interpration No. 48 (�FIN 48�)
�Accounting for Uncertainty in Income Taxes� in the first quarter
of 2007. Net income for the first quarter of 2006 included a charge
of $8.3 million resulting from the early extinguishment of debt.
EBITDA (see description below) was $22.1 million in the first
quarter of 2007 compared with $24.8 million for the quarter ended
March 31, 2006. EBITDA for the first quarter of 2007 benefited from
an approximate $1.9 million environmental credit that was offset by
$1.5 million in severance expenses and $350,000 in costs related to
a fire at a Clean Harbors� facility in Thorold, Ontario in February
2007. EBITDA for the quarter also was affected by the absence of
large emergency response projects and seasonality. Comments on the
First Quarter �Clean Harbors delivered the strongest first-quarter
revenues in our history as we once again generated double digit
sales growth,� said Alan S. McKim, Chairman and Chief Executive
Officer. �Our results reflect the diversity of our business as
contributions from our expanding Site Services segment, as well as
from the Teris acquisition, drove our top-line performance. Our
revenue growth is even more impressive in light of some softness in
our landfill volumes and scheduled maintenance shutdowns at six of
our incinerators that greatly reduced our capacity utilization in
the quarter. Also, there was limited emergency response work in the
quarter compared with $13 million in the first quarter of 2006
related to the Gulf coast clean-up efforts.� �Looking at our
bottom-line performance, there were a number of variables that
affected our results this quarter,� McKim said. �Based on the
decreased contributions from incinerators, landfills and emergency
response, our product mix was skewed toward more lower margin
business than in the comparable period in 2006. We also incurred
severance payments related to a strategic realignment of the
company where we reduced our overhead across our organization by
125 employees. Higher professional fees for accounting and tax
consulting services, to comply with new accounting pronouncements,
specifically FIN 48, also contributed to our lower margin in the
quarter.� 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 2007 and 2006 (in
thousands): For the three months ended: March 31, March 31, 2007�
2006� � Net income $ 3,501� $ 2,805� Accretion of environmental
liabilities 2,474� 2,510� Depreciation and amortization 8,938�
7,279� Loss on early extinguishment of debt �� 8,290� Interest
expense, net 3,184� 3,173� Provision for income taxes 3,974� 695�
Other (income) expense (6) 30� EBITDA $ 22,065� $ 24,782� Business
Outlook and Financial Guidance �A combination of positive market
trends and company initiatives reinforces our outlook for the
remainder of this year,� said McKim. �We are confident that we can
grow EBITDA faster than revenues. We remain committed to our
ongoing cost reduction initiatives and we are confident that the
leverage that is inherent in our business model will enable us to
increase our EBITDA margin in the coming quarters.� �At the same
time, a rebound from this quarter�s seasonally slow period should
boost revenues, increase incineration utilization and ultimately,
raise operating margins,� said McKim. �In recent weeks, we have bid
and won several large projects, which should enhance our
performance, particularly in the second half of 2007. Also, price
increases we implemented this quarter will help support our
profitability growth in the coming quarters.� �Regarding the status
of the Teris integration, we are on plan and expect to see improved
margins by the third quarter of this year,� McKim concluded. Based
on its first-quarter results and current market conditions, the
Company expects revenue in the range of $225 million to $230
million for the second quarter of 2007. The Company expects to
generate EBITDA for the second quarter of 2007 in the range of $33
million to $36 million. Clean Harbors also reiterated its guidance
for the full year 2007. The Company expects to increase annual
revenues by 8 percent to 9 percent, and achieve annual 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 news release
today 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 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 (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,
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: March 31,
March 31, 2007� 2006� � Revenues $205,024� $184,495� Cost of
revenues 151,604� 131,358� Selling, general and administrative
expenses 31,355� 28,355� Accretion of environmental liabilities
2,474� 2,510� Depreciation and amortization 8,938� 7,279� Income
from operations 10,653� 14,993� Other income (expense) 6� (30) Loss
on early extinguishment of debt �� (8,290) Interest expense, net
(3,184) (3,173) Income before provision for income taxes 7,475�
3,500� Provision for income taxes (1) 3,974� 695� Net income 3,501�
2,805� Redemption of Series C Preferred Stock, dividends on Series
B and C Preferred Stocks and accretion on Series C Preferred Stock
69� 69� Net income attributable to common stockholders $3,432�
$2,736� Earnings per share: Basic income attributable to common
stockholders $0.17� $0.14� Diluted income attributable to common
stockholders $0.17� $0.14� � Weighted average common shares
outstanding 19,750� 19,390� Weighted average common shares
outstanding plus potentially dilutive common shares 20,637� 20,509�
(1) Provision for income taxes for Q1 2007 and Q1 2006 includes
$1,234 and $238, respectively, for expenses associated with
uncertain tax positions. CLEAN HARBORS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS ASSETS (in thousands) � (Unaudited)
March 31, December 31, 2007� 2006� Current assets: Cash and cash
equivalents $57,948� $73,550� Marketable securities 11,117� 10,240�
Accounts receivable, net 160,780� 169,581� Unbilled accounts
receivable 15,364� 16,078� Deferred costs 6,899� 7,140� Prepaid
expenses 10,219� 9,301� Supplies inventories 20,742� 20,101�
Deferred tax assets 9,281� 9,238� Income tax receivable 151� 150�
Properties held for sale 7,327� 7,440� Total current assets
299,828� 322,819� � Property, plant and equipment, net 240,727�
244,126� � Other assets: Deferred financing costs 7,182� 7,206�
Goodwill 21,667� 19,032� Permits and other intangibles, net 65,967�
65,743� Investment in joint venture �� 2,208� Deferred tax assets
11,464� 6,388� Other 3,781� 3,286� 110,061� 103,863� Total assets
$650,616� $670,808� CLEAN HARBORS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS LIABILITIES AND STOCKHOLDERS� EQUITY
(in thousands) (Unaudited) March 31, December 31, 2007� 2006�
Current liabilities: Uncashed checks $6,919� $11,083� Current
portion of capital lease obligations 1,193� 1,391� Accounts payable
69,722� 81,432� Accrued disposal costs 2,888� 3,058� Deferred
revenue 28,779� 29,409� Other accrued expenses 42,569� 53,941�
Current portion of closure, post-closure and remedial liabilities
12,418� 13,707� Income taxes payable 2,092� 4,333� Total current
liabilities 166,580� 198,354� Other liabilities: Closure and
post-closure liabilities, less current portion 24,526� 23,520�
Remedial liabilities, less current portion 136,219� 136,173�
Long-term obligations, less current maturities 120,549� 120,522�
Capital lease obligations, less current portion 2,657� 2,648� Other
long-term liabilities 57,673� 15,609� Accrued pension cost 755�
796� Total other liabilities 342,379� 299,268� Total stockholders�
equity, net 141,657� 173,186� Total liabilities and stockholders�
equity $650,616� $670,808�
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