Clean Harbors(US:CLH)2023-02-28 16:00Financial Performance - Total third-party revenues for the year ended December 31, 2022, were $5,166.605 million, with $4,144.973 million from Environmental Services and $1,021.125 million from Safety-Kleen Sustainability Solutions [744]. - Pro forma combined revenues for 2021 were $4,380.724 million, with a net income of $229.807 million, indicating growth from the previous year [757]. - Total third-party revenues for the year ended December 31, 2020, were $3,144.1 million, with $2,637.6 million from the United States and $404.5 million from Canada [776]. - The company recognized a gain on the sale of a business amounting to $8.9 million for the year ended December 31, 2022, after accounting for the assets sold and transaction costs [819]. Debt and Interest Rates - The effective annual interest rate on the $350.0 million 2024 Term Loans is 4.67%, combining a 2.92% rate from interest rate swaps and a 1.75% margin [631]. - The company has total borrowings of $545.0 million in senior unsecured notes with fixed interest rates of 4.875% and 5.125% due in 2027 and 2029, respectively [660]. - The company estimates that a 100 basis point change in the average interest rate on its total variable rate debt of $504.0 million would change its average annual interest expense by approximately $5.8 million [662]. - The 2028 Term Loans had an outstanding principal amount of $990.0 million as of December 31, 2022, with interest rates based on either the Eurodollar Rate plus 2.00% or the Base Rate plus 1.00% [807]. Acquisitions and Goodwill - The company acquired a privately-owned business for $22.8 million, recognizing $16.3 million in goodwill, enhancing its Safety-Kleen Sustainability Solutions segment [646]. - The company finalized the purchase accounting for the acquisition of HydroChemPSC, with total identifiable net assets valued at $46.863 million and goodwill of $32.015 million [752]. - The Company signed a purchase agreement on February 9, 2023, to acquire a privately-owned company for approximately $100.0 million, aimed at expanding its Environmental Services segment in the southeastern United States [781]. - Goodwill of $676.7 million was assigned to the Environmental Sales and Service reporting unit following the acquisition of HydroChemPSC, reflecting future economic benefits and synergies [784]. - Goodwill decreased to $676,701 thousand as of December 31, 2022, from $683,463 thousand in 2021, representing a decline of about 0.11% [815]. Environmental and Remedial Liabilities - The balance of landfill final closure and post-closure liabilities increased from $53.4 million in 2021 to $62.3 million in 2022, reflecting a significant financial commitment to environmental compliance [665]. - Remedial liabilities at December 31, 2022, were $116.3 million, compared to $111.9 million in 2021, indicating ongoing costs related to environmental cleanup and compliance [725]. - The Company uses a discount rate range of 1.37% to 4.90% for determining the present value of remedial liabilities, indicating a conservative approach to estimating future obligations [698]. - The balance of non-landfill closure and post-closure liabilities increased to $56.6 million as of December 31, 2022, up from $45.7 million in 2021, reflecting the costs associated with dismantling and decontaminating structures [722]. Revenue Recognition and Accounts Receivable - The Company recognizes revenue primarily from services based on time and materials, with significant revenue generated from short-term projects governed by long-term master service agreements [738]. - The company established a revenue allowance to cover estimated variable consideration, with no material changes in estimates reported during the periods presented [778]. - Accounts receivable as of December 31, 2022, were reported at $964.603 million, an increase from $792.734 million in 2021 [746]. - Contract assets (unbilled receivables) increased to $107.010 million from $94.963 million year-over-year [746]. - Contract liabilities (deferred revenue) rose to $94.094 million compared to $83.749 million in the previous year [746]. Capital Expenditures and Assets - The Company reported a total property, plant, and equipment net value of $1,980.3 million as of December 31, 2022, up from $1,863.2 million in 2021 [792]. - The company reported total inventories and supplies of $324,994 thousand as of December 31, 2022, up from $250,692 thousand in 2021, marking a significant increase of approximately 29.6% [821]. - The company’s capitalized software and computer equipment have an estimated useful life of 3-5 years, reflecting the depreciation strategy for technology assets [684]. - The company utilizes the units-of-consumption method for amortizing landfill assets, which includes future estimated construction and asset retirement costs [690]. Other Financial Metrics - The company recorded a revenue allowance of $24.659 million at the end of 2022, up from $24.136 million in 2021, indicating an increase in anticipated revenue adjustments [680]. - The total cash equivalents reported were $34.008 million, while total marketable securities amounted to $62.033 million, leading to a total of $96.041 million in liquid assets [677]. - The Company contributed $25.3 million to defined contribution plans in 2022, up from $20.5 million in 2021 and $18.6 million in 2020, reflecting increased employee participation [730]. - The company recognized $2.5 million in goodwill from the acquisition of a privately-owned business for $12.4 million, expanding its Safety-Kleen Sustainability Solutions segment [814].