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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported): May 2, 2018
 
CLEAN HARBORS, INC.
(Exact name of registrant as specified in its charter) 
 
 
 
 
 
 
Massachusetts
 
001-34223
 
04-2997780
(State or other jurisdiction
of incorporation)
 
(Commission
File Number)
 
(IRS Employer
Identification No.)
 
 
 
 
42 Longwater Drive, Norwell, Massachusetts
 
02061-9149
(Address of principal executive offices)
 
(Zip Code)
 
Registrant’s telephone number, including area code (781) 792-5000
 
Not Applicable
(Former name or former address, if changed since last report.)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) 
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) 
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) 
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o





Item 7.01 Regulation FD Disclosure
 
During the first quarter of fiscal year 2018, certain of the Company's businesses undertook a reorganization which included changes to the underlying business and management structures. The reorganization resulted in combining the Environmental Services businesses from an operational and management perspective and is expected to deepen customer relationships and allow for efficiencies across the Company's operations through the sharing of resources, namely labor and equipment which will reduce third party spend and promote the cross selling of such business offerings. In connection with this reorganization, the Company’s chief operating decision maker also requested changes in the information that he regularly reviews for purposes of allocating resources and assessing performance. These changes required a reconsideration of the Company’s operating segments in the first quarter of 2018 and resulted in a change in the Company’s assessment of its operating segments. Upon reconsideration of the identification of the Company’s operating segments, the Company concluded that there are now two operating segments for disclosure in accordance with ASC 280 Segment reporting; (i) the Environmental Services segment which consists of the Company’s historical Technical Services, Industrial Services, Field Services and Oil, Gas and Lodging businesses and (ii) the Safety-Kleen segment.
The operations not managed through the Company’s operating segments described above are recorded as “Corporate Items.” Corporate Items revenues consist of two different operations for which the revenues are insignificant. Corporate Items cost of revenues represents certain central services that are not allocated to the Company's operating segments for internal reporting purposes. Corporate Items selling, general and administrative expenses include typical corporate items such as legal, accounting and other items of a general corporate nature that are not allocated to the Company’s operating segments. 
The primary financial measure by which the Company evaluates the performance of its segments is Adjusted EBITDA which consists of net income (loss) plus accretion of environmental liabilities, depreciation and amortization, interest expense, net, loss on early extinguishment of debt, provision (benefit) for income taxes, other gains or non-cash charges (including gain on sale of businesses and goodwill impairment charge) not deemed representative of fundamental segment results and excludes other expense (income), net. Transactions between the segments are accounted for at the Company’s best estimate based on similar transactions with outside customers.
Exhibit 99.1 to this report on Form 8-K provides an unaudited recast summary of the Company’s historical reportable segment level operating results for the four fiscal quarters and full year ended December 31, 2017 and full year end December 31, 2016. The information contained in this report and attached Exhibit 99.1 is being furnished pursuant to Regulation FD in order to provide the financial community with summary financial information and historical data that is on a basis consistent with how we report current financial information.
The recasting of previously issued financial information in attached Exhibit 99.1 does not represent a restatement of previously-issued financial statements and does not affect our reported net (loss) income, (loss) earnings per share, total assets, or stockholders’ equity for any of the previously reported periods. 
The information furnished in Item 7.01, including attached Exhibit 99.1, shall not be deemed “filed” for any purpose, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, regardless of any general incorporation language in any such filing. This report shall not be deemed an admission as to the materiality of any information in this report and attached Exhibit 99.1 that is provided in connection with Regulation FD.
Item 9.01 Financial Statements and Exhibits
 
(d) Exhibits.
Exhibit No.
 
Description
99.1

 





SIGNATURES
 
Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
  
 
Clean Harbors, Inc.
 
(Registrant)
 
 
 
 
May 2, 2018
/s/ Michael L. Battles
 
Executive Vice President and Chief Financial Officer



Exhibit


EXHIBIT 99.1
Full Year 2017 by Quarter and Full Year 2016 Unaudited Segment Information
The following table sets forth certain financial information associated with our results of operations (unaudited, in thousands):
 
Summary of Operations (in thousands)
 
For the Three Months Ended
 
For the Twelve Months Ended
 
March 31,
2017
 
June 30,
2017
 
September 30,
2017
 
December 31,
2017
 
December 31,
2017
 
December 31,
2016
Direct Revenues(1):
 
 
 
 
 
 
 
 
 
 
 
Environmental Services
$
428,896

 
$
481,590

 
$
472,681

 
$
474,307

 
$
1,857,474

 
$
1,758,833

Safety-Kleen
260,835

 
271,315

 
283,274

 
272,462

 
1,087,886

 
996,083

Corporate Items
(790
)
 
(117
)
 
(109
)
 
634

 
(382
)
 
310

Total
688,941

 
752,788

 
755,846

 
747,403

 
2,944,978

 
2,755,226

Cost of Revenues(2):
 
 
 
 
 
 
 
 
 
 
 
Environmental Services
327,861

 
347,042

 
345,951

 
352,935

 
1,373,789

 
1,287,629

Safety-Kleen
171,748

 
172,684

 
175,220

 
170,692

 
690,344

 
645,275

Corporate Items
(3,024
)
 
77

 
(1,576
)
 
3,063

 
(1,460
)
 
(47
)
Total
496,585

 
519,803

 
519,595

 
526,690

 
2,062,673

 
1,932,857

Selling, General and Administrative Expenses:
 
 
 
 
 
 
 
 
 
 
 
Environmental Services
40,845

 
39,716

 
40,225

 
41,589

 
162,375

 
152,129

Safety-Kleen
36,719

 
38,350

 
37,749

 
34,913

 
147,731

 
131,262

Corporate Items
34,657

 
34,228

 
35,278

 
42,379

 
146,542

 
138,624

Total
112,221

 
112,294

 
113,252

 
118,881

 
456,648

 
422,015

Adjusted EBITDA
 
 
 
 
 
 
 
 
 
 
 
Environmental Services
60,190

 
94,832

 
86,505

 
79,783

 
321,310

 
319,075

Safety-Kleen
52,368

 
60,281

 
70,305

 
66,857

 
249,811

 
219,546

Corporate Items
(32,423
)
 
(34,422
)
 
(33,811
)
 
(44,808
)
 
(145,464
)
 
(138,267
)
Total
$
80,135

 
$
120,691

 
$
122,999

 
$
101,832

 
$
425,657

 
$
400,354

___________________________________
(1) Direct revenue is revenue allocated to the segment performing the provided service.
(2) Cost of revenue is shown exclusive of items presented separately on the statements of operations, which consist of (i) accretion of environmental liabilities and (ii) depreciation and amortization.
    
The following is a reconciliation of net (loss) income to Adjusted EBITDA (unaudited, in thousands):
 
For the Three Months Ended
 
For the Twelve Months Ended
 
March 31,
2017
 
June 30,
2017
 
September 30,
2017
 
December 31,
2017
 
December 31,
2017
 
December 31,
2016
Net (loss) income
$
(21,393
)
 
$
25,880

 
$
12,058

 
$
84,194

 
$
100,739

 
$
(39,873
)
Accretion of environmental liabilities
2,290

 
2,416

 
2,347

 
2,407

 
9,460

 
10,177

Depreciation and amortization
72,412

 
71,531

 
72,989

 
71,490

 
288,422

 
287,002

Goodwill impairment charge
—

 
—

 
—

 
—

 
—

 
34,013

Other expense (income), net
1,549

 
833

 
432

 
3,305

 
6,119

 
(6,195
)
Loss on early extinguishment of debt
—

 
6,045

 
1,846

 
—

 
7,891

 
—

(Gain) loss on sale of businesses
—

 
(31,722
)
 
77

 
913

 
(30,732
)
 
(16,884
)
Interest expense, net
22,576

 
22,492

 
20,675

 
20,065

 
85,808

 
83,525

Provision (benefit) for income taxes
2,701

 
23,216

 
12,575

 
(80,542
)
 
(42,050
)
 
48,589

Adjusted EBITDA
$
80,135

 
$
120,691

 
$
122,999

 
$
101,832

 
$
425,657

 
$
400,354