Core Viewpoint - Clean Harbors, Inc. (CLH) reported strong first-quarter 2024 results, with earnings and revenues exceeding the Zacks Consensus Estimate, leading to a 5.9% stock price increase since the results announcement on April 30 [1][2]. Financial Performance - CLH's earnings per share (EPS) were $1.09, surpassing the Zacks Consensus Estimate by 6.9%, although this represents a 15.5% decrease from the same quarter last year [2]. - Total revenues reached $1.4 billion, slightly exceeding the consensus estimate and reflecting a 4% year-over-year increase [2]. Segment Performance - Environmental Services (ES) revenues were $1.2 billion, a 3.9% increase from the previous year, driven by the HEPACO acquisition, higher pricing, and increased incineration utilization [3]. - Safety-Kleen Sustainability Solutions (SKSS) generated revenues of $224.8 million, a 4.4% year-over-year increase, but fell short of the estimate of $230.1 million, with growth attributed to pricing initiatives and new product offerings [4]. Profitability Metrics - Adjusted EBITDA was $234.9 million, slightly above projections but marginally increased from the previous year, with an adjusted EBITDA margin of 16.4%, down 30 basis points year-over-year [5]. - Segment-wise, adjusted EBITDA for ES was $274.6 million, a 3.8% year-over-year increase, while SKSS adjusted EBITDA was $28.3 million, down 4.9% from the previous year [6]. Balance Sheet and Cash Flow - At the end of the quarter, CLH had cash and cash equivalents of $489.4 million, down from $687.2 million in the previous quarter, with inventories at $376 million [7]. - Long-term debt remained stable at $2.8 billion, and the company generated $1.6 billion in net cash from operating activities, with capital expenditures of $118.7 million [8]. Future Guidance - For Q2 2025, CLH has lowered its adjusted EBITDA growth guidance to 1-3%, down from the previous estimate of 4-6% [9]. - The guidance for adjusted EBITDA for 2025 is set at $1.15-$1.21 billion, with expected adjusted free cash flow of $430-$490 million [9].

Clean Harbors (CLH) FY Conference Summary Company Overview - **Company**: Clean Harbors (CLH) - **Event**: Oppenheimer's 20th Annual Industrial Growth Conference - **Date**: May 08, 2025 Key Points Industry Insights - **Safety Culture**: Clean Harbors emphasizes a strong safety culture, reporting a record low Total Recordable Incident Rate (TRIR) in Q1. The company believes that safety improvements can lead to long-term financial benefits, although the financial impact may take time to materialize due to the lag in incident reporting and treatment costs [3][4][6][7]. - **Healthcare and Legal Costs**: Rising healthcare costs and legal judgments are significant concerns for the industry. Clean Harbors aims to offset these costs through improved safety measures, which can reduce the frequency and severity of incidents [6][7][8]. Financial Performance - **Margin Targets**: The company aims for a 22% margin by 2027, with a current target of 19% by the end of 2024. Environmental services have shown consistent margin expansion over the past 12 quarters, with a goal of reaching 30% margins [13][19][21][22]. - **Revenue Composition**: Environmental services account for 91% of the company's EBITDA, indicating a strong focus on this segment for future growth [20][21]. Capital Allocation Strategy - **Return on Invested Capital (ROIC)**: Clean Harbors prioritizes capital allocation based on ROIC, focusing on organic growth, mergers and acquisitions (M&A), and returning capital to shareholders. The company has $430 million remaining under its buyback program and no debt due until 2027 [24][25][29][30]. - **M&A Landscape**: The environmental services industry remains fragmented, presenting opportunities for acquisitions, particularly in areas where Clean Harbors holds a smaller market share [31][32][33]. Operational Developments - **Tech Services Growth**: The captive market for hazardous waste management is expected to shrink, providing growth opportunities for Clean Harbors as competitors close operations. The company is well-positioned to capture market share from these closures [36][37][38]. - **New Capacity**: The company is ramping up operations at its new facility, expecting to process 28,000 tons of waste this year. The demand pipeline appears strong, with significant waste streams from various industries [40][41][49]. PFAS Incineration - **EPA and DOD Collaboration**: Clean Harbors is conducting tests with the EPA and DOD for PFAS incineration, which could unlock significant opportunities for the company, particularly in military installations where PFAS contamination is prevalent [52][54][57][58]. Industrial Services Outlook - **Deferred Maintenance**: Customers are deferring maintenance and turnaround work, which may lead to increased spending in the latter half of the year. The company anticipates modest growth in industrial services despite a challenging start to the year [59][60][61][62]. Technology and Safety Innovations - **Automation and Safety**: Clean Harbors is investing in technology to enhance safety and efficiency in its operations, including the use of drones for inspections and advanced water jetting techniques [66][67][69][70]. Field Services Expansion - **New Locations**: The company plans to open approximately 30 new field service branches this year, significantly increasing its footprint in the market. This expansion is aimed at capturing more business in a fragmented industry [75][76][78]. Containerized Waste Services - **Demand Growth**: The containerized waste services segment is performing well, driven by route density and entrepreneurial efforts from the team to capture more business [82][84]. Cross-Selling Opportunities - **Integrated Services**: Clean Harbors is leveraging its integrated service model to cross-sell between its various service lines, enhancing customer engagement and operational efficiency [86][88][90]. Conclusion Clean Harbors is strategically positioned for growth in the environmental services industry, focusing on safety, margin expansion, and capital allocation. The company is actively pursuing opportunities in M&A, technology advancements, and expanding its operational footprint to enhance its market presence and financial performance.

Clean Harbors (CLH) Conference Summary Industry Overview - Clean Harbors is the largest hazardous industrial waste service company in North America, focusing primarily on hazardous waste with some medical waste services due to incineration capabilities [4][10] - The waste industry is becoming more integrated, covering solid, industrial, and medical waste [4] Macroeconomic Outlook - The macroeconomic outlook has improved since the beginning of the year, with a strong pipeline and growth observed in April [7][8] - Despite concerns about cyclicality, Clean Harbors has shown resilience, with no signs of customers reducing demand [8][20] Business Segments Environmental Services - The Environmental Services segment has improved margins by 500 basis points over the last six to eight years, attributed to new incinerator capacity, better pricing strategies, and operational efficiencies [10][11] - The company has experienced 12 consecutive quarters of year-over-year EBITDA margin growth in this segment [17] Used Oil and Safety Clean Solutions - The used oil segment has faced profitability challenges post-pandemic, but a shift in strategy to prioritize pricing over volume has led to improved stability [81][86] - The company processes approximately 250 million gallons of used motor oil annually, converting it into base oil [82] Capacity and Market Dynamics - There is ample landfill capacity, but incineration capacity is constrained due to the complex nature of waste streams [28][30] - Clean Harbors has added new incineration capacity and expects this to be absorbed by the market due to ongoing demand [30][34] Regulatory Environment and PFAS - Clean Harbors has introduced a total PFAS solution, which includes testing, remediation, and disposal services, with projected revenue growth of 10% to 20% in this area [64][70] - The company is actively involved in addressing PFAS issues, with a long-term view on regulatory developments and market needs [68][69] Mergers and Acquisitions - The company has expanded its market share through acquisitions, allowing for better pricing discipline and stability in the Environmental Services segment [50][52] - Future M&A strategies will focus on geographic expansion and enhancing capabilities in waste management [53] Conclusion - Clean Harbors is positioned well within the hazardous waste industry, demonstrating resilience against macroeconomic challenges and adapting its business strategies to maintain profitability and growth [17][19][88]

Financial Performance - Total revenues for Q1 2025 reached $1,431,950, an increase of 4.0% compared to $1,376,695 in Q1 2024[13] - Net income for Q1 2025 was $58,680, down 16.0% from $69,832 in Q1 2024[13] - Earnings per share (EPS) for Q1 2025 were $1.09, compared to $1.29 in Q1 2024, reflecting a decrease of 15.5%[13] - Comprehensive income for Q1 2025 was $53,748, down from $65,545 in Q1 2024, a decrease of 18.0%[17] - Adjusted EBITDA for the Environmental Services segment was $274,591,000 for Q1 2025, compared to $264,475,000 in Q1 2024, reflecting an increase of about 4.3%[90] - Total Reportable Segment Adjusted EBITDA for Q1 2025 was $302,843,000, an increase from $294,175,000 in Q1 2024, representing a growth of 2.3%[93] Assets and Liabilities - Total current assets decreased to $2,310,682 as of March 31, 2025, from $2,433,796 at the end of 2024, a decline of 5.0%[11] - Cash and cash equivalents decreased to $489,417 from $687,192, representing a decline of 28.8%[11] - Total liabilities decreased slightly to $4,675,563 as of March 31, 2025, from $4,673,749 at the end of 2024[11] - Total stockholders' equity as of March 31, 2025, was $2,571,224, a slight decrease from $2,573,529 at the end of 2024[11] - As of March 31, 2025, the company had total long-term debt of $2.77 billion, slightly down from $2.79 billion as of December 31, 2024[61] Revenue Segments - Environmental Services segment revenues for the three months ended March 31, 2025, were $1,207.04 million, compared to $1,161.28 million in the same period of 2024, reflecting an increase of about 4%[37] - Safety-Kleen Sustainability Solutions revenues for the three months ended March 31, 2025, were $224.82 million, up from $215.31 million in the prior year, indicating a growth of approximately 4%[37] - Technical Services generated revenues of $426.21 million for the three months ended March 31, 2025, compared to $407.49 million in the same period of 2024, marking an increase of approximately 5%[37] - Industrial Services and Other revenues were $322.46 million for the three months ended March 31, 2025, compared to $359.50 million in the same period of 2024, reflecting a decrease of about 10%[37] - Field and Emergency Response Services revenues were $215.70 million for the three months ended March 31, 2025, compared to $163.47 million in the same period of 2024, indicating a significant increase of approximately 32%[37] Acquisitions - The Company acquired HEPACO on March 22, 2024, for an all-cash purchase price of $392.2 million, enhancing its Environmental Services segment[40] - The Company finalized the purchase accounting for the acquisition of Noble Oil Services, Inc. for an all-cash purchase price of $68.7 million, net of cash acquired[43] - The Company completed the acquisition of three additional privately-owned businesses for a total cash consideration of $17.1 million in 2024[47] Cash Flow and Investments - Cash flows from operating activities were $1,605 for Q1 2025, a significant decrease from $18,549 in Q1 2024[19] - The company reported a net cash used in investing activities of $120,330, compared to $609,873 in Q1 2024[19] - The company repurchased $55,000 in common stock during Q1 2025, compared to $5,000 in Q1 2024[19] Legal and Regulatory Matters - As of March 31, 2025, the Company has been identified as a potentially responsible party for 132 Superfund sites, with potential monetary liability exceeding $1.0 million at three of these sites[83] - The Company has approximately 71 pending product liability cases related to Safety-Kleen's products, with insurance coverage expected to cover most claims, excluding punitive damages[81] - The company has indemnification agreements at 17 of the 126 third-party Superfund sites, which cover liabilities for waste disposed of prior to acquisition[84] Expenses - Selling, general and administrative expenses for the reportable segments totaled $111,630,000 for Q1 2025, compared to $114,633,000 for Q1 2024, indicating a decrease of approximately 2.6%[90] - Interest expense for Q1 2025 was $36,077,000, compared to $28,539,000 in Q1 2024, reflecting a significant increase of 26.4%[93] - Corporate costs for Q1 2025 amounted to $67,989,000, up from $64,080,000 in Q1 2024, indicating an increase of 4.5%[93] Stock and Compensation - Total stock-based compensation cost recognized for the three months ended March 31, 2025, was $7.6 million, an increase from $6.3 million in the same period of 2024[69] - The total fair value of restricted stock vested during the three months ended March 31, 2025, was $15 million, compared to $3.7 million in the prior year[70] - As of March 31, 2025, there was $11.9 million of total unrecognized compensation cost arising from performance stock awards deemed probable of vesting[73]

Core Insights - Clean Harbors reported revenue of $1.43 billion for the quarter ended March 2025, a year-over-year increase of 4% [1] - The company's EPS for the same period was $1.09, down from $1.29 a year ago [1] - The reported revenue exceeded the Zacks Consensus Estimate of $1.42 billion, resulting in a surprise of +0.89% [1] - Clean Harbors delivered an EPS surprise of +6.86%, with the consensus EPS estimate being $1.02 [1] Revenue Breakdown - Environmental Services revenue was $1.21 billion, matching the average estimate from three analysts, representing a year-over-year increase of +3.1% [4] - Safety-Kleen Sustainability Solutions revenue was $222.74 million, exceeding the average estimate of $194.66 million, with a year-over-year change of +9.1% [4] - Corporate Items revenue was $0.10 million, consistent with the average estimate from two analysts, but down -4.9% compared to the year-ago quarter [4] Adjusted EBITDA Performance - Adjusted EBITDA for Environmental Services was $274.59 million, slightly above the estimate of $273.41 million from three analysts [4] - Adjusted EBITDA for Corporate Items was -$67.99 million, compared to the average estimate of -$66.52 million from three analysts [4] - Adjusted EBITDA for Safety-Kleen Sustainability Solutions was $28.25 million, surpassing the estimate of $22.88 million from three analysts [4] Stock Performance - Clean Harbors shares returned +6.6% over the past month, while the Zacks S&P 500 composite experienced a -0.2% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Core Viewpoint - Clean Harbors reported quarterly earnings of $1.09 per share, exceeding the Zacks Consensus Estimate of $1.02 per share, but down from $1.29 per share a year ago, indicating a 15.5% year-over-year decline in earnings [1][2] Financial Performance - The company achieved revenues of $1.43 billion for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 0.89% and showing a year-over-year increase from $1.38 billion [2] - Over the last four quarters, Clean Harbors has surpassed consensus EPS estimates three times and topped revenue estimates four times [2] Stock Performance - Clean Harbors shares have declined approximately 7% since the beginning of the year, compared to a 5.5% decline in the S&P 500 [3] - The current Zacks Rank for Clean Harbors is 3 (Hold), indicating expected performance in line with the market in the near future [6] Earnings Outlook - The consensus EPS estimate for the upcoming quarter is $2.31 on revenues of $1.58 billion, and for the current fiscal year, it is $7.50 on revenues of $6.12 billion [7] - The trend of estimate revisions for Clean Harbors is currently mixed, which may change following the recent earnings report [6] Industry Context - The Waste Removal Services industry, to which Clean Harbors belongs, is currently ranked in the bottom 20% of over 250 Zacks industries, suggesting potential challenges ahead [8]

First-Quarter 2025 Investor Review April 30, 2025 1 Forward Looking Statements and GAAP Disclaimer These slides contain (and the accompanying oral discussion will contain) forward-looking statements, which 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' ...

Financial Data and Key Metrics Changes - Company revenue increased by 4% in Q1, totaling $55 million growth, with the Environmental Services (ES) segment contributing two-thirds of that growth [27][8] - Adjusted EBITDA for Q1 was $235 million, with a margin of 16.4%, slightly down year-over-year but in line with expectations [28][27] - Net income for Q1 was down compared to the same period last year, with earnings per share reported at $1.09 [29] Business Line Data and Key Metrics Changes - The ES segment saw a 3% increase in revenue and a 4% increase in adjusted EBITDA, driven by the acquisition of Hefeco and higher incineration utilization [9][8] - Safety Kleen Environmental Services (SKSS) revenue increased year-over-year, reflecting greater volumes and a shift to a higher Charge for Oil (CFO), although adjusted EBITDA decreased slightly [15][16] - Industrial Services revenue declined by 10% year-over-year due to refinery customers delaying spending and maintenance [12][13] Market Data and Key Metrics Changes - The total recordable incident rate (TRIR) for safety was reported at 0.46, marking the best quarter in the company's history [5][6] - Incineration utilization improved to 88% from 79% in Q1 2024, with incineration pricing rising more than 5% on a mix-adjusted basis [10][11] - The company processed 5,000 tons in its new kiln during Q1, with a goal to process over 28,000 tons for the year [11][19] Company Strategy and Development Direction - The company is focusing on internal and external growth opportunities, with a strong cash balance and low leverage to support its growth strategy [20][22] - There is an emphasis on capitalizing on synergies through M&A while also investing in expanding processing and recycling capabilities [20][21] - The company aims to stabilize the SKSS segment while maximizing the value of its assets and minimizing downside potential [24][22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the demand for services, particularly in disposal and recycling, despite potential impacts from tariffs [22][70] - The company anticipates a strong second half of the year, with a robust pipeline of remediation and waste projects [24][22] - Management remains cautious about the industrial services segment but believes in the long-term prospects due to the necessity of the services provided [24][70] Other Important Information - The company ended Q1 with a cash balance approaching $600 million and a net debt to EBITDA ratio of approximately 2.1 times [29][30] - A credit rating upgrade by Moody's was received during the quarter, reflecting strong financial performance and capital policies [30][29] - Adjusted free cash flow for Q1 was negative $116 million, consistent with the previous year, primarily due to timing of incentive comp payments and seasonal working capital increases [31][30] Q&A Session Summary Question: Impact of weather on ES segment performance - Management indicated that weather negatively impacted Q1 performance, estimating a loss of $10 million to $12 million in EBITDA due to difficult conditions in January [41][42] Question: Guidance for Q2 and refinery turnarounds - Management confirmed that Q2 guidance does not include large-scale emergency response events and expects a better second half with over 150 planned refinery turnarounds [44][45] Question: Cyclicality of the ES segment - Management described the ES segment as recession-resistant, with continued strong growth expected in the second and third quarters [49][50] Question: Update on PFAS revenue growth - Management confirmed a strong pipeline for PFAS solutions, expecting revenue growth in the range of 15% to 20% for the year [59][60] Question: Base oil pricing and inventory status - Management acknowledged pressure on base oil pricing but highlighted successful pricing initiatives that doubled the average price charged for used oil collection [100][101] Question: M&A pipeline and current environment - Management noted that valuations remain high for assets, but the company is actively reviewing multiple deals while being selective [91][92]

Financial Data and Key Metrics Changes - Company revenue increased by 4% in Q1, totaling $55 million, with the Environmental Services (ES) segment accounting for two-thirds of that growth [23][6] - Adjusted EBITDA for Q1 was $235 million, with a margin of 16.4%, down year over year but in line with expectations [24][29] - Net income for Q1 was down compared to the same period last year, with earnings per share of $1.09 [25][29] - Cash and short-term marketable securities approached $600 million at quarter-end, with a net debt to EBITDA ratio of approximately 2.1 times [26][27] Segment Performance Changes - In the ES segment, adjusted EBITDA increased by 4% with a 3% revenue increase, resulting in a 10 basis point margin improvement [7][24] - The Safety Kleen Environmental Services (SKSS) segment saw revenue growth year over year, driven by higher volumes and a shift to a higher charge for oil, despite lower base oil pricing [13][14] - Industrial Services revenue decreased by 10% year over year due to refinery customers delaying spending and maintenance [10][11] Market Data and Key Metrics Changes - The total recordable incident rate (TRIR) was 0.46 in Q1, marking the best quarter in the company's history [5] - Incineration utilization was 88% in Q1, up from 79% in Q1 2024, with incineration pricing rising more than 5% on a mix-adjusted basis [8][9] - The company gathered 58 million gallons of waste oil in Q1, compared to 55 million gallons a year ago [14] Company Strategy and Industry Competition - The company is focused on internal and external growth opportunities, with a strong cash balance and low leverage to support its growth strategy [18][20] - The company is optimistic about its prospects for 2025, citing strong demand for disposal services and a robust pipeline of remediation and waste projects [20][22] - The company is committed to further adjusting pricing and reducing costs to offset inflation and tariff impacts [12][20] Management's Comments on Operating Environment and Future Outlook - Management noted that weather negatively impacted Q1 performance, estimating a loss of $10 million to $12 million in EBITDA due to weather conditions [36][37] - The company remains optimistic about the demand environment, particularly in the ES segment, and expects continued strong growth despite potential economic slowdowns [20][66] - Management emphasized the resilience of the ES segment, stating it is recession-resistant and has a strong backlog of waste and project opportunities [45][66] Other Important Information - The company plans to continue its buyback program, having repurchased nearly 260,000 shares for a total of $55 million in Q1 [28][29] - The company expects adjusted free cash flow for 2025 to be in the range of $430 million to $490 million, representing a nearly 30% increase from 2024 [32] Q&A Session Summary Question: Impact of weather on ES segment performance - Management acknowledged that weather had a significant impact in January, estimating a loss of $10 million to $12 million in EBITDA due to adverse conditions, but noted strong recovery in March [36][37] Question: Expectations for refinery turnarounds in Industrial Services - Management indicated that over 150 turnarounds are planned for the second half of the year, expecting a better performance in that segment [40][41] Question: Cyclicality of the ES segment - Management stated that the ES segment is recession-resistant, with continued strong growth expected in the second and third quarters [44][66] Question: Update on PFAS revenue growth - Management expressed confidence in achieving 15% to 20% revenue growth for PFAS-related services this year, supported by a strong regulatory framework [54][55] Question: Base oil pricing and inventory status - Management noted that base oil pricing has been under pressure but highlighted successful pricing initiatives that have offset some of the challenges [94][96]

Financial Performance - Revenues grew 4% to $1.43 billion in Q1 2025, compared to $1.38 billion in Q1 2024[4] - Net income for Q1 2025 was $58.7 million, or $1.09 per diluted share, down from $69.8 million, or $1.29 per diluted share in Q1 2024[4] - Adjusted EBITDA for Q1 2025 was $234.9 million, slightly up from $230.1 million in the same period of 2024[5] - Revenues for the three months ended March 31, 2025, increased to $1,431,950, compared to $1,376,695 for the same period in 2024, representing a growth of approximately 4%[23] - Net income decreased to $58,680 for Q1 2025, down from $69,832 in Q1 2024, reflecting a decline of about 16%[23] - Basic and diluted earnings per share for Q1 2025 were both $1.09, compared to $1.29 in Q1 2024, indicating a decrease of approximately 15.5%[23] Segment Performance - The Environmental Services segment achieved 4% growth in Adjusted EBITDA and 3% growth in revenue, driven by a 32% increase in Field Services operations[6] - Safety-Kleen Sustainability Solutions segment revenues increased 9% due to higher volumes sold and cost-cutting efforts[8] - Adjusted EBITDA for the Environmental Services segment increased to $274,591 in Q1 2025, compared to $264,475 in Q1 2024, showing an increase of about 3%[29] - The Environmental Services segment generated revenues of $1,209,113 in Q1 2025, up from $1,172,510 in Q1 2024, reflecting an increase of about 3%[29] Cash Flow and Assets - Adjusted free cash flow is projected to be between $430 million and $490 million, indicating a nearly 30% increase from the prior year[9] - The company reported cash flows from operating activities of $1,605 for Q1 2025, down from $18,549 in Q1 2024, a decline of approximately 91%[27] - Total current assets decreased to $2,310,682 as of March 31, 2025, from $2,433,796 at the end of 2024, a decline of about 5%[25] - Cash and cash equivalents decreased significantly to $489,417 from $687,192, representing a drop of approximately 29%[27] - Total liabilities decreased slightly to $4,675,163 as of March 31, 2025, from $4,674,612 at the end of 2024, indicating a marginal reduction[25] Future Guidance - For full-year 2025, Clean Harbors expects Adjusted EBITDA in the range of $1.15 billion to $1.21 billion, representing 6% growth year over year[9] - Clean Harbors is maintaining its Adjusted EBITDA and adjusted free cash flow guidance despite uncertainties in U.S. trade policies[9] - The company plans to focus on managing collection costs and advancing initiatives like the Castrol partnership and Group III production in the SKSS segment[9] Other Financial Metrics - The company incurred interest expense of $36,077 in Q1 2025, compared to $28,539 in Q1 2024, representing an increase of approximately 26%[23] - The company reported an impressive incineration utilization rate of 88% in Q1 2025, up from 79% in the prior year[8]