Core Insights - The company experienced slight shortfalls in Q3 results primarily due to slowdowns in field and industrial services, alongside higher-than-expected employee healthcare costs, but remains optimistic about growth in waste collection and disposal assets [1][18][26] - Year-on-year growth was driven by increased waste volumes, pricing gains, and productivity improvements, with a consolidated adjusted EBITDA margin increase of 100 basis points to 20.7% [2][18] - The company reported total revenue of $1.55 billion in Q3, with adjusted EBITDA rising 6% to $320 million, reflecting effective pricing and cost-saving strategies [18][19] Financial Performance - Q3 revenue increased by 3% year-over-year, with adjusted EBITDA up 7%, driven by waste volumes and pricing, despite a decline in industrial and field services [4][19] - The adjusted EBITDA margin for Environmental Services grew for the fourteenth consecutive quarter, reflecting strong operational performance [4][19] - Net income grew modestly year-over-year, delivering earnings per share of $2.21, with cash and short-term marketable securities totaling $850 million [20][21] Segment Performance - The Environmental Services segment saw a 12% growth in Technical Services, with landfill volumes up 40% year-over-year and incineration utilization at 92% [4][5] - Safety Kleen Environmental Services reported an 8% increase in revenue, driven by pricing gains and growth in core service offerings [5][19] - Field services revenue declined by 11% due to the absence of medium to large response projects, while industrial services also faced a 4% revenue decline [6][7][19] Strategic Initiatives - The company is focused on margin growth and has implemented productivity and cost-saving initiatives, which are expected to benefit from improving macroeconomic conditions [1][2][19] - A successful PFAS incineration study in partnership with the EPA is anticipated to generate $100 million to $120 million in revenue this year, representing a 20% to 25% increase from the previous year [8][9] - Plans to construct a new state-of-the-art process plant are underway, with an expected total spend of $210 million to $220 million, projected to generate annual EBITDA of $30 million to $40 million [12][13] Capital Allocation and Future Outlook - The company is evaluating both bolt-on transactions and larger acquisitions, with a potential investment of over $500 million in internal projects over the next several years [14][15] - Share repurchases totaled $50 million in Q3, with a remaining authorization of approximately $380 million [24][25] - The company anticipates a strong finish to the year, with expectations for continued growth in waste projects and a positive economic outlook despite recent challenges [16][26][28]

Financial Data and Key Metrics Changes - Total revenue for Q3 increased to $1.55 billion, reflecting growth in environmental services and a diversified customer base [20][21] - Adjusted EBITDA rose 6% to $320 million, with a consolidated Adjusted EBITDA margin expanding to 20.7%, driven by pricing initiatives and cost reduction efforts [20][21] - Net income grew modestly year over year, delivering earnings per share of $2.21 [22] Business Line Data and Key Metrics Changes - Environmental Services (ES) segment revenue increased by 3%, with Adjusted EBITDA margin growing for the 14th consecutive quarter [6][7] - Technical services within ES saw a 12% revenue growth, while landfill volumes increased by 40% year over year [7][8] - Safety-Kleen Sustainable Solutions (SKSS) segment delivered over $40 million in EBITDA, marking its strongest quarter in a year despite pricing headwinds [13][21] Market Data and Key Metrics Changes - Incineration utilization was high at 92%, with demand remaining strong due to diverse end markets [7] - Field services revenue declined by 11% due to the absence of medium to large response projects, while industrial services revenue decreased by 4% [8][9] - PFAS-related sales are expected to generate $100 million-$120 million in revenue this year, up 20%-25% from the previous year [10][11] Company Strategy and Development Direction - The company is focused on margin growth through pricing gains, productivity improvements, and cost-saving strategies [4][5] - Plans to construct a new processing plant (SDA unit) with an expected total spend of $210 million-$220 million, anticipated to generate annual EBITDA of $30 million-$40 million [15][16] - The company is actively evaluating M&A opportunities while maintaining a disciplined approach to capital allocation [16][82] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about future growth despite current macroeconomic challenges, anticipating a recovery in industrial services and field services as economic conditions improve [18][28] - The project pipeline remains substantial, with growing PFAS opportunities expected to contribute meaningfully to future activity [18][28] - Management expects to achieve profitability targets for SKSS in 2025, indicating stabilization in that segment [19][27] Other Important Information - The company reported record cash flows in Q3, ending with cash and short-term marketable securities of $850 million, providing substantial flexibility for capital allocation [22][23] - SG&A expenses as a percentage of revenue increased to 12.2%, reflecting higher healthcare costs and professional fees [21] Q&A Session Summary Question: What were the main factors behind the $15 million guidance reduction? - The reduction was primarily due to shortfalls in industrial services ($7 million) and field services ($4 million), along with elevated healthcare costs impacting the entire company [34][35] Question: What is the outlook for EBITDA growth in 2026? - Management targets a 5% EBITDA growth for next year, driven by cost-cutting initiatives and volume growth in waste businesses [39] Question: What is the company's M&A outlook? - The company is considering both larger and smaller deals, remaining prudent and disciplined in its approach to M&A [40][42] Question: Can you clarify the expected performance of the SKSS segment? - Management is confident in achieving the $140 million EBITDA target for SKSS, with a few million on either side as a potential range [73][74] Question: What is the current state of the incinerator pricing? - Incineration pricing is expected to grow at mid-single digits, consistent with prior quarters, while technical services saw double-digit growth [77][78]

Financial Data and Key Metrics Changes - Total revenue for Q3 increased to $1.55 billion, reflecting growth in environmental services and a diversified customer base [20][21] - Adjusted EBITDA rose 6% to $320 million, with a consolidated adjusted EBITDA margin expanding to 20.7%, driven by pricing initiatives and cost reduction efforts [20][21] - Net income grew modestly year over year, delivering earnings per share of $2.21 [23] Business Line Data and Key Metrics Changes - Environmental Services (ES) segment revenue increased by 3%, with adjusted EBITDA margin growing for the 14th consecutive quarter [5][6] - Technical services within ES saw a 12% revenue growth, while Safety-Kleen Environmental services rose 8% [8][20] - Field services revenue declined by 11% due to the absence of medium to large response projects [8][9] Market Data and Key Metrics Changes - Incineration utilization was high at 92%, with landfill volumes up 40% from a year ago [7][20] - PFAS-related sales are expected to generate $100 to $120 million in revenue this year, up 20% to 25% from the previous year [10][11] - The company anticipates that spending constraints in industrial services will loosen as economic conditions improve [18] Company Strategy and Development Direction - The company is focused on margin growth and productivity enhancements, with plans for significant internal investments exceeding $500 million over the next several years [16][17] - A new state-of-the-art processing plant (SDA unit) is planned, expected to generate annual EBITDA of $30 million to $40 million upon completion [15] - The company remains active in evaluating M&A opportunities while maintaining a disciplined approach to capital allocation [16][80] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth, citing strong momentum in waste collection and disposal assets despite current macroeconomic challenges [5][18] - The company expects to navigate current economic turbulence and anticipates a recovery in industrial services and field services in the coming quarters [29] - Management highlighted the importance of ongoing cost management and operational efficiency to mitigate rising healthcare costs [33][40] Other Important Information - The company reported a record level of free cash flow in Q3, with cash and short-term marketable securities totaling $850 million [24][25] - SG&A expenses as a percentage of revenue increased to 12.2%, reflecting higher healthcare costs and professional fees [22] - The company has raised its full-year adjusted free cash flow guidance to a midpoint of $475 million, representing over 30% growth from 2024 [28] Q&A Session Summary Question: What were the main factors behind the $15 million guidance reduction? - The reduction was primarily due to shortfalls in industrial services ($7 million) and field services ($4 million), along with elevated healthcare costs impacting the overall company by about $6 million [33][34] Question: What is the outlook for EBITDA growth in 2026? - Management expects to target a 5% EBITDA growth based on cost-cutting initiatives and volume growth in waste businesses, despite not anticipating a rebound in industrial turnarounds until spring [41][42] Question: What is the company's M&A outlook? - The company is actively looking at both larger and smaller deals, maintaining a disciplined approach to ensure good returns on shareholder investments [44][80] Question: What is the expected range for SKSS EBITDA this year? - Management expressed high confidence in achieving the $140 million EBITDA mark for SKSS, with a potential range of a few million on either side [72][73] Question: How does the SDA unit investment relate to M&A strategy? - The SDA unit investment does not reflect a change in M&A appetite; it has been a planned investment for years, and the company remains open to various capital allocation opportunities [79][80]

Third-Quarter 2025 Investor Review October 29, 2025 © 2025 CLEAN HARBORS 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, statemen ...