Clean Harbors(CLH)2025-02-19 19:04Debt and Borrowing - As of December 31, 2024, the company held $1,464.9 million of variable rate debt under secured senior term loans due in 2028, with an effective annual interest rate of approximately 3.71% on $600.0 million due to interest rate swaps[315][316]. - The company has total borrowings of $2,809.9 million, including $1,419.6 million in secured senior term loans due in 2028 and $545.0 million in unsecured senior notes due in 2027 with a fixed interest rate of 4.875%[318][319]. - Interest payments on the $600.0 million of secured senior term loans, effectively fixed by the 2022 swaps, are approximately $1.9 million per month[320]. - The company estimates that a 100 basis point change in the average interest rate on the remaining variable portion of long-term debt could change annual interest expense by up to approximately $8.6 million[320]. - As of December 31, 2024, the company had no borrowings outstanding under its revolving credit agreement, with $470.0 million available to borrow[321]. - The company has a maximum borrowing capacity of $600.0 million under its revolving credit facility, with $130.0 million in letters of credit issued[321]. - Long-term debt increased to $2.8 billion as of December 31, 2024, compared to $2.3 billion in 2023, with secured senior term loans due in 2028 totaling $1.4 billion[489]. - The estimated fair value of the Company's long-term debt was $2.8 billion in 2024, based on market data considered Level 2 measures[489]. - The Company amended the Term Loan Agreement to incur an additional $500.0 million in term loans, resulting in total outstanding term loans of $1.48 billion as of December 31, 2024[491]. - The interest rate margin for the Term Loans is set at 1.75% for Term SOFR borrowings or 0.75% for base rate borrowings, with a Term SOFR floor of 0.00% and a Base Rate floor of 1.00%[492]. - The Company entered into interest rate swap agreements with a notional amount of $600.0 million to fix the interest rate on the 2028 Term Loans, resulting in an effective annual interest rate of approximately 3.71450% after recent amendments[512]. - The effective annual interest rate on the swapped portion of the 2028 Term Loans decreased to 3.82898% following the Fourth Amendment on December 27, 2023[512]. Financial Performance - Total revenues for 2024 reached $5,889,952, an increase of 8.8% from $5,409,152 in 2023[341]. - Service revenues grew to $4,928,023, up 10.8% from $4,449,542 in the previous year[341]. - Net income for 2024 was $402,299, representing a 6.4% increase compared to $377,856 in 2023[341]. - Cash and cash equivalents increased to $687,192, a significant rise of 54.5% from $444,698 at the end of 2023[347]. - Total assets grew to $7,377,278, up 15.6% from $6,382,869 in 2023[339]. - The company reported a total current liabilities of $1,102,666, an increase from $1,037,537 in 2023[339]. - Earnings per share (EPS) for 2024 was $7.46, compared to $6.99 in 2023, reflecting a 6.7% increase[341]. - Cash flows from operating activities amounted to $777,771, an increase from $734,552 in 2023[347]. - The company invested $432,241 in property, plant, and equipment, slightly up from $422,300 in 2023[347]. - Total stockholders' equity rose to $2,573,529, an increase of 14.5% from $2,247,506 in 2023[339]. - Net income for the year ended December 31, 2024, was $402.299 million, compared to $377.856 million for 2023, representing an increase of approximately 6.4%[350]. - Total stockholders' equity increased from $2.247 billion in 2023 to $2.573 billion in 2024, reflecting a growth of about 14.5%[350]. - The allowance for doubtful accounts at December 31, 2024, was $22.908 million, up from $22.568 million in 2023, indicating a slight increase of 1.5%[362]. - Total marketable securities decreased from $106.101 million in 2023 to $102.634 million in 2024, a decline of approximately 3.5%[356]. - The company repurchased 237 thousand shares of common stock in 2024, totaling $55.211 million, compared to 328 thousand shares for $51.379 million in 2023[350]. - Stock-based compensation expenses for 2024 were $27.981 million, compared to $20.703 million in 2023, marking an increase of approximately 35%[350]. - The balance of cash and cash equivalents decreased from $133.643 million in 2023 to $106.669 million in 2024, a reduction of about 20.1%[356]. - The company issued 125 thousand shares for restricted share vesting in 2024, resulting in a net decrease of $13.759 million due to employee tax withholdings[350]. - Other comprehensive loss for 2024 was $38.296 million, compared to a loss of $8.158 million in 2023, indicating a significant increase in losses[350]. - The company maintained a zero balance in U.S. bank disbursement accounts, utilizing its cash management program effectively[357]. Environmental and Remedial Liabilities - Total remedial liabilities recorded as of December 31, 2024, were $111.7 million, reflecting the costs associated with environmental remediation efforts[335]. - The Company’s remedial liabilities increased slightly from $111.2 million in 2023 to $111.7 million in 2024[392]. - The Company anticipates total remedial liabilities of $129.3 million over the next five years, with $10.3 million expected in 2025[482]. - Closure and post-closure liabilities totaled $129.8 million as of December 31, 2024, reflecting a balance increase from $118.6 million in 2023[478]. - Remedial liabilities amounted to $111.7 million as of December 31, 2024, with a notable increase in liabilities for an existing Superfund site by $2.9 million[481]. - The Company has 25 inactive facilities with remedial liabilities of $57.0 million, representing 51.0% of total liabilities[484]. - The Company executed planned closure activities at its non-commercial landfill in Deer Park, Texas, with no changes to estimated closure costs[478]. - Accretion for closure and post-closure liabilities was $9.5 million in 2024, reflecting ongoing obligations[479]. Acquisitions and Growth - The acquisition of HEPACO on March 22, 2024, was completed for $392.2 million, enhancing the Environmental Services segment's field services[439]. - The acquisition of Noble Oil Services, Inc. on March 1, 2024, was finalized for $68.7 million, expanding oil collection operations in the southeastern U.S.[442]. - The company reported a goodwill of $186,911 thousand from the HEPACO acquisition, reflecting expected operating synergies and growth potential[440]. - The company completed three additional acquisitions in 2024 for a total cash consideration of $17.1 million, consolidating into Environmental Services and SKSS segments[447]. - The total purchase price for the recent acquisition was $110.855 million, with identifiable net assets valued at $71.291 million and goodwill recognized at $39.564 million[451]. - The company acquired a privately-owned business for $78.9 million on June 17, 2022, enhancing waste oil collection capabilities in the southeastern United States[453]. - The final allocation of the purchase price for the June 2022 acquisition included $22.231 million in property, plant, and equipment and $23.5 million in permits and other intangibles[456]. Revenue Sources and Segments - The Company generates revenues from Environmental Services and SKSS segments, with significant sources including Technical Services, Industrial Services, and Safety-Kleen Environmental Services[420]. - Revenues from Technical Services are primarily generated from waste material management and disposal services, recognized over time as services are performed[420]. - Field and Emergency Response Services revenues include contributions from the acquisition of HEPACO Blocker, Inc., recognized over time based on customer consumption of services[424]. - Safety-Kleen Oil revenues are generated from bulk sales of lubricating oils and recycled fuel oil, recognized at a point in time upon transfer of control[429]. - The company’s technical services revenue for 2024 was $1,733,550 thousand, representing a 10.9% increase from $1,563,847 thousand in 2023[430]. - Safety-Kleen Environmental Services generated $1,183,883 thousand in revenue for 2024, compared to $1,102,041 thousand in 2023, marking a 7.4% increase[430]. - Total third-party revenues for the year ended December 31, 2024, reached $5,889,952 thousand, a 8.8% increase from $5,409,152 thousand in 2023[430]. - The United States generated $5,352,423 thousand in total revenues for 2024, accounting for approximately 90.8% of total revenues[430]. Assets and Liabilities - The company reported a total current liabilities of $1,102,666, an increase from $1,037,537 in 2023[339]. - The company's property, plant, and equipment net value increased to $2.447941 billion as of December 31, 2024, compared to $2.193318 billion in 2023, reflecting a growth of 11.6%[462]. - Goodwill increased from $1.287736 billion in 2023 to $1.477199 billion in 2024, primarily due to current period acquisitions totaling $193.368 million[467]. - The company recorded depreciation expense of $346.5 million for the year ended December 31, 2024, up from $315.5 million in 2023[464]. - The total amortizable intangible assets increased to $701.987 million as of December 31, 2024, from $602.797 million in 2023[471]. - Accrued expenses and other current liabilities rose to $419.4 million in 2024, up from $397.2 million in 2023, primarily due to increased accrued compensation and benefits[475]. - The balance of landfill final closure and post-closure liabilities was $59.4 million at both December 31, 2024 and 2023[385]. - Non-landfill closure and post-closure liabilities increased from $59.2 million in 2023 to $70.4 million in 2024[388]. - Amortization expense for intangible assets increased to $54.4 million in 2024 from $50.3 million in 2023, with expected amortization totaling $582.5 million over the next several years[474].