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): November 2, 2022
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||||||||||||
| (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:
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 ☐
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. ☐
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||||||||
Item 2.02 Results of Operations and Financial Condition
On November 2, 2022, Clean Harbors, Inc. (the “Company”) issued a press release announcing the Company’s results of operations for the third quarter ended September 30, 2022. A copy of that press release is furnished with this report as Exhibit 99.1.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits. The following exhibits are being furnished herewith:
| Exhibit No. | Description | |||||||
| 99.1 | ||||||||
| 104 | The cover page from this Current Report on Form 8-K, formatted in iXBRL (Inline eXtensible Business Reporting Language) | |||||||
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) | |||||
| November 2, 2022 | /s/ Michael L. Battles | ||||
| Executive Vice President and Chief Financial Officer | |||||
2
EXHIBIT 99.1
Press Release
Clean Harbors Announces Third-Quarter 2022 Financial Results
•Reports Q3 Revenue Growth of 43% to $1.36 Billion, Driven by Strong Demand for Services and Addition of HydroChemPSC
•Delivers Q3 Net Income of $135.8 Million, EPS of $2.50 and Adjusted EPS of $2.43
•Achieves Q3 Adjusted EBITDA Growth of 67% to $308.6 Million
•Revises 2022 Adjusted EBITDA and Adjusted Free Cash Flow Guidance
•Announces CEO Succession Plan in Separate News Release Today
NORWELL, Mass. – November 2, 2022 – Clean Harbors, Inc. (“Clean Harbors”) (NYSE: CLH), the leading provider of environmental and industrial services throughout North America, today announced financial results for the third quarter ended September 30, 2022.
“In the third quarter, favorable market dynamics combined with the quality of our offerings drove continued broad-based demand for our comprehensive suite of environmental services and sustainable products,” said Alan S. McKim, Chairman, President and Chief Executive Officer. “We extended our strong 2022 performance with a revenue increase of 43%, growth in Adjusted EBITDA of 67% and a corresponding improvement in Adjusted EBITDA margins of 310 basis points to 22.6%. Our positive results were driven by profitable growth contributions from both of our operating segments. Most importantly, our safety performance in the quarter and year to date was the best in our history with a Total Recordable Incident Rate (TRIR) of just 0.74 through nine months – far below our annual goal of less than 1.0.”
Third-Quarter Results
Revenues increased 43% to $1.36 billion from $951.5 million in the same period of 2021. Income from operations nearly doubled to $209.1 million from $104.8 million in the third quarter of 2021.
Net income was $135.8 million, or $2.50 per diluted share. This compared with net income of $65.4 million, or $1.20 per diluted share, for the same period in 2021. Adjusted for certain items in both periods, adjusted net income was $132.4 million, or $2.43 per diluted share, for the third quarter of 2022, compared with adjusted net income of $62.2 million, or $1.14 per diluted share, for the same period of 2021. (See reconciliation tables below).
Adjusted EBITDA (see description below) increased 67% to $308.6 million from $185.1 million in the same period of 2021.
Q3 2022 Segment Review
“Environmental Services (ES) revenues increased 46% year-over-year, and Adjusted EBITDA in the segment rose 57%. Our profitable growth was driven by the October 2021 acquisition of HydroChemPSC (HPC), robust
Clean Harbors • 42 Longwater Drive • PO Box 9149 • Norwell, Massachusetts 02061-9149 • 800.282.0058 • www.cleanharbors.com
volumes of high-value waste streams, pricing initiatives to combat inflation and strong utilization of people and equipment across all our service businesses,” McKim said. “Utilization of our incinerator network was a healthy 86% in the quarter, up from 82% a year ago. Average incineration pricing rose 10% from a year ago, reflecting price increases and the impact of higher-value waste streams. Landfill volumes increased 38% as we continued to capture more remediation and waste projects. On the strength of sizeable summer activity, our Industrial Services business performed well in the quarter. Safety-Kleen Environmental revenue grew 23% as its core service offerings remained in demand, particularly in the automotive service vertical. Field Services delivered a 29% increase in revenue through the addition of HPC’s utilities business and a variety of local emergency response projects throughout our network. In addition to higher revenue, ES also benefitted from cost-control initiatives and operational efficiencies, resulting in segment EBITDA margin improving 170 basis points from a year ago.
“Safety-Kleen Sustainability Solutions (SKSS) delivered record quarterly results as revenues grew 34% in the third quarter, and Adjusted EBITDA climbed 46% from a year ago,” McKim said. “Demand for our base oil was high in Q3 and our network of re-refineries ran well, including the new Georgia plant we acquired in June. We also achieved growth across all of our recycling services offered in this segment including oil filter collection and antifreeze recycling. Waste oil collections remained strong at 62 million gallons. Since its formation less than two years ago, our SKSS team has proven adept at actively managing the front end of our re-refining spread to maximize profitability. The SKSS segment achieved its record performance in the quarter despite the fact that our blended volumes were severely limited by supply chain disruptions resulting from an industrywide additive shortage. The additive industry is beginning to recover, and we expect our blended volumes to increase in 2023 as that remains part of our long-term growth strategy for this segment.”
Business Outlook and Financial Guidance
“Looking ahead, we expect to close out 2022 with a strong fourth-quarter performance,” McKim said. “Within Environmental Services, we continue to see a record backlog of waste and healthy demand for our network of disposal and recycling assets. We anticipate a solid finish to the year through a combination of base business and project work. Our service businesses are all entering the final quarter of the year with good momentum. We are continuing to hire as rapidly as possible across our Environmental Services segment to facilitate additional growth while also reducing our third-party spend.
“Within SKSS, the record results we are achieving this year demonstrate how well we are managing both ends of our re-refining spread,” McKim said. “We are seeing growing interest in our sustainable products, including our recently launched KLEEN+ brand, as customers seek ESG friendly solutions. We are confident that the inherent value of our base oil will increase in the years ahead. On the front end of our re-refining spread, we are continuing to collect the volumes needed for our plants at better rates due to the long-term market impact of IMO 2020, the internal changes we made to the organization, and continuous improvements in our systems and transportation.
“Given our year-to-date performance, we are raising our annual Adjusted EBITDA guidance to more than $1 billion, which reflects the acceleration of demand for our environmentally focused services and products. Our
Clean Harbors • 42 Longwater Drive • PO Box 9149 • Norwell, Massachusetts 02061-9149 • 800.282.0058 • www.cleanharbors.com
revenue is growing more rapidly than we had expected, which is driving higher than anticipated working capital needs. In addition, we are carrying a higher level of critical inventories to ensure we stay ahead of global supply chain shortages. Therefore, we are reducing our adjusted free cash flow guidance to reflect the timing of working capital from those two factors. With the ongoing backdrop of high inflation and interest rate hikes, we are continuing to execute on our strategies for pricing, cost mitigation and operational efficiencies to drive further margin improvement. We anticipate leveraging the strengths of both operating segments to achieve record top- and bottom-line results in 2022,” McKim concluded.
Based on its year-to-date performance and current market conditions, Clean Harbors is revising its 2022 Adjusted EBITDA and adjusted free cash flow guidance. For the year, the Company now expects:
•Adjusted EBITDA in the range of $1.010 billion to $1.030 billion, or a midpoint of $1.020 billion. This range is based on anticipated GAAP net income in the range of $387 million to $410 million; and
•Adjusted free cash flow in the range of $260 million to $290 million, or a midpoint of $275 million. This range is based on anticipated net cash from operating activities in the range of $585 million to $635 million.
Non-GAAP Results
Clean Harbors reports Adjusted EBITDA, which is a non-GAAP financial measure and should not be considered as an alternative to net income or other measurements under generally accepted accounting principles (GAAP), but viewed only as a supplement to those measurements. Adjusted EBITDA is not calculated identically by all companies, and therefore the Company’s measurement of Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies. Clean Harbors believes that Adjusted EBITDA provides additional useful information to investors since the Company’s loan covenants are based upon levels of Adjusted EBITDA achieved and management routinely evaluates the performance of its businesses based upon levels of Adjusted EBITDA. The Company defines Adjusted EBITDA in accordance with its existing revolving credit agreement, as described in the following reconciliation showing the differences between reported net income and Adjusted EBITDA for the three and nine months ended September 30, 2022 and 2021 (in thousands, except percentages):
| For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||||||
| September 30, 2022 | September 30, 2021 | September 30, 2022 | September 30, 2021 | ||||||||||||||||||||
| Net income | $ | 135,799 | $ | 65,443 | $ | 329,270 | $ | 154,254 | |||||||||||||||
| Accretion of environmental liabilities | 3,246 | 2,799 | 9,599 | 8,625 | |||||||||||||||||||
| Stock-based compensation | 7,828 | 6,001 | 20,375 | 12,786 | |||||||||||||||||||
| Depreciation and amortization | 88,394 | 71,451 | 260,560 | 215,206 | |||||||||||||||||||
| Other (income) expense, net | (104) | (199) | (2,073) | 2,509 | |||||||||||||||||||
| Gain on sale of business | — | — | (8,864) | — | |||||||||||||||||||
| Interest expense, net of interest income | 28,081 | 17,984 | 79,354 | 53,953 | |||||||||||||||||||
| Provision for income taxes | 45,311 | 21,605 | 109,663 | 54,973 | |||||||||||||||||||
| Adjusted EBITDA | $ | 308,555 | $ | 185,084 | $ | 797,884 | $ | 502,306 | |||||||||||||||
| Adjusted EBITDA Margin | 22.6 | % | 19.5 | % | 20.5 | % | 18.7 | % | |||||||||||||||
Clean Harbors • 42 Longwater Drive • PO Box 9149 • Norwell, Massachusetts 02061-9149 • 800.282.0058 • www.cleanharbors.com
This press release includes a discussion of net income and earnings per share adjusted for the impacts of tax-related valuation allowances and other items as identified in the reconciliations provided below. The Company believes that discussion of these additional non-GAAP measures provides investors with meaningful comparisons of current results to prior periods’ results by excluding items that the Company does not believe reflect its fundamental business performance. The following shows the difference between net income and adjusted net income, and the difference between earnings per share and adjusted earnings per share, for the three and nine months ended September 30, 2022 and 2021 (in thousands, except per share amounts):
| For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||||||
| September 30, 2022 | September 30, 2021 | September 30, 2022 | September 30, 2021 | ||||||||||||||||||||
| Adjusted net income | |||||||||||||||||||||||
| Net income | $ | 135,799 | $ | 65,443 | $ | 329,270 | $ | 154,254 | |||||||||||||||
| Gain on sale of business | — | — | (8,864) | — | |||||||||||||||||||
| Tax-related valuation allowances and other | (3,399) | (3,228) | (9,494) | (3,221) | |||||||||||||||||||
| Adjusted net income | $ | 132,400 | $ | 62,215 | $ | 310,912 | $ | 151,033 | |||||||||||||||
| Adjusted earnings per share | |||||||||||||||||||||||
| Earnings per share | $ | 2.50 | $ | 1.20 | $ | 6.04 | $ | 2.81 | |||||||||||||||
| Gain on sale of business | — | — | (0.16) | — | |||||||||||||||||||
| Tax-related valuation allowances and other | (0.07) | (0.06) | (0.18) | (0.06) | |||||||||||||||||||
Adjusted earnings per share | $ | 2.43 | $ | 1.14 | $ | 5.70 | $ | 2.75 | |||||||||||||||
Adjusted Free Cash Flow Reconciliation
Clean Harbors reports adjusted free cash flow, which it considers to be a measurement of liquidity that provides useful information to investors about its ability to generate cash. The Company defines adjusted free cash flow as net cash from operating activities excluding cash impacts of items derived from non-operating activities, less additions to property, plant and equipment plus proceeds from sale and disposal of fixed assets. The Company excludes cash impacts of items derived from non-operating activities such as taxes paid in connection with divestitures. Adjusted free cash flow should not be considered an alternative to net cash from operating activities or other measurements under GAAP. Adjusted free cash flow is not calculated identically by all companies, and therefore the Company’s measurement of adjusted free cash flow may not be comparable to similarly titled measures reported by other companies.
An itemized reconciliation between net cash from operating activities and adjusted free cash flow is as follows for the three and nine months ended September 30, 2022 and 2021 (in thousands):
Clean Harbors • 42 Longwater Drive • PO Box 9149 • Norwell, Massachusetts 02061-9149 • 800.282.0058 • www.cleanharbors.com
| For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||||||
| September 30, 2022 | September 30, 2021 | September 30, 2022 | September 30, 2021 | ||||||||||||||||||||
| Adjusted free cash flow | |||||||||||||||||||||||
| Net cash from operating activities | $ | 225,572 | $ | 102,794 | $ | 357,542 | $ | 368,226 | |||||||||||||||
| Additions to property, plant and equipment | (96,505) | (54,666) | (244,547) | (146,654) | |||||||||||||||||||
| Proceeds from sale and disposal of fixed assets | 2,095 | 12,945 | 5,118 | 16,424 | |||||||||||||||||||
| Adjusted free cash flow | $ | 131,162 | $ | 61,073 | $ | 118,113 | $ | 237,996 | |||||||||||||||
Adjusted EBITDA Guidance Reconciliation
An itemized reconciliation between projected GAAP net income and projected Adjusted EBITDA is as follows (in millions):
| For the Year Ending December 31, 2022 | |||||||||||
| Projected GAAP net income | $387 | to | $410 | ||||||||
| Adjustments: | |||||||||||
| Accretion of environmental liabilities | 13 | to | 12 | ||||||||
| Stock-based compensation | 26 | to | 29 | ||||||||
| Depreciation and amortization | 345 | to | 335 | ||||||||
| Gain on sale of business | (9) | to | (9) | ||||||||
| Interest expense, net | 115 | to | 113 | ||||||||
| Provision for income taxes | 133 | to | 140 | ||||||||
| Projected Adjusted EBITDA | $1,010 | to | $1,030 | ||||||||
Adjusted Free Cash Flow Guidance Reconciliation
An itemized reconciliation between projected net cash from operating activities and projected adjusted free cash flow is as follows (in millions):
| For the Year Ending December 31, 2022 | |||||||||||
| Projected net cash from operating activities | $585 | to | $635 | ||||||||
| Additions to property, plant and equipment | (330) | to | (350) | ||||||||
| Proceeds from sale and disposal of fixed assets | 5 | to | 5 | ||||||||
| Projected adjusted free cash flow | $260 | to | $290 | ||||||||
Conference Call Information
Clean Harbors will conduct a conference call for investors today at 9:00 a.m. (ET) to discuss the information contained in this press release. During the call, management will discuss Clean Harbors’ financial results, business outlook and growth strategy. Investors who wish to listen to the webcast and view the accompanying slides should visit the Investor Relations section of the Company’s website at www.cleanharbors.com. The live call also can be accessed by dialing 201.689.8881 or 877.709.8155 prior to the start time. If you are unable to listen to the live conference call, the webcast will be archived on the Company’s website.
Clean Harbors • 42 Longwater Drive • PO Box 9149 • Norwell, Massachusetts 02061-9149 • 800.282.0058 • www.cleanharbors.com
About Clean Harbors
Clean Harbors (NYSE: CLH) is North America’s leading provider of environmental and industrial services. The Company serves a diverse customer base, including a majority of Fortune 500 companies. Its customer base spans a number of industries, including chemical, energy and manufacturing, as well as numerous government agencies. These customers rely on Clean Harbors to deliver a broad range of services such as end-to-end hazardous waste management, emergency spill response, industrial cleaning and maintenance, and recycling services. Through its Safety-Kleen subsidiary, Clean Harbors also is North America’s largest re-refiner and recycler of used oil and a leading provider of parts washers and environmental services to commercial, industrial and automotive customers. Founded in 1980 and based in Massachusetts, Clean Harbors operates in the United States, Canada, Mexico, Puerto Rico and India. For more information, visit www.cleanharbors.com.
Safe Harbor Statement
Any statements contained herein that are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are generally identifiable by use of the words “believes,” “expects,” “intends,” “anticipates,” “plans to,” “seeks,” “should,” “estimates,” “projects,” “may,” “likely,” or similar expressions. Such statements may include, but are not limited to, statements about future financial and operating results, and other statements that are not historical facts. Such statements are based upon the beliefs and expectations of Clean Harbors’ management as of this date only and are subject to certain risks and uncertainties that could cause actual results to differ materially, including, without limitation, those items identified as “Risk Factors” in Clean Harbors’ most recently filed Form 10-K and Form 10-Q. Forward-looking statements are neither historical facts nor assurances of future performance. Therefore, readers are cautioned not to place undue reliance on these forward-looking statements. Clean Harbors undertakes no obligation to revise or publicly release the results of any revision to these forward-looking statements other than through its filings with the Securities and Exchange Commission, which may be viewed in the “Investors” section of Clean Harbors’ website at www.cleanharbors.com.
Contacts:
Michael L. Battles | Jim Buckley | |||||||
EVP and Chief Financial Officer | SVP Investor Relations | |||||||
Clean Harbors, Inc. | Clean Harbors, Inc. | |||||||
781.792.5100 | 781.792.5100 | |||||||
InvestorRelations@cleanharbors.com | Buckley.James@cleanharbors.com | |||||||
Clean Harbors • 42 Longwater Drive • PO Box 9149 • Norwell, Massachusetts 02061-9149 • 800.282.0058 • www.cleanharbors.com
CLEAN HARBORS, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
| For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||||||
| September 30, 2022 | September 30, 2021 | September 30, 2022 | September 30, 2021 | ||||||||||||||||||||
| Revenues | $ | 1,363,086 | $ | 951,479 | $ | 3,888,507 | $ | 2,686,085 | |||||||||||||||
| Cost of revenues: (exclusive of items shown separately below) | 910,648 | 639,232 | 2,652,506 | 1,817,654 | |||||||||||||||||||
| Selling, general and administrative expenses | 151,711 | 133,164 | 458,492 | 378,911 | |||||||||||||||||||
| Accretion of environmental liabilities | 3,246 | 2,799 | 9,599 | 8,625 | |||||||||||||||||||
| Depreciation and amortization | 88,394 | 71,451 | 260,560 | 215,206 | |||||||||||||||||||
| Income from operations | 209,087 | 104,833 | 507,350 | 265,689 | |||||||||||||||||||
| Other income (expense), net | 104 | 199 | 2,073 | (2,509) | |||||||||||||||||||
| Gain on sale of business | — | — | 8,864 | — | |||||||||||||||||||
| Interest expense, net | (28,081) | (17,984) | (79,354) | (53,953) | |||||||||||||||||||
| Income before provision for income taxes | 181,110 | 87,048 | 438,933 | 209,227 | |||||||||||||||||||
| Provision for income taxes | 45,311 | 21,605 | 109,663 | 54,973 | |||||||||||||||||||
| Net income | $ | 135,799 | $ | 65,443 | $ | 329,270 | $ | 154,254 | |||||||||||||||
| Earnings per share: | |||||||||||||||||||||||
| Basic | $ | 2.51 | $ | 1.20 | $ | 6.07 | $ | 2.83 | |||||||||||||||
| Diluted | $ | 2.50 | $ | 1.20 | $ | 6.04 | $ | 2.81 | |||||||||||||||
| Shares used to compute earnings per share - Basic | 54,111 | 54,411 | 54,278 | 54,553 | |||||||||||||||||||
| Shares used to compute earnings per share - Diluted | 54,381 | 54,707 | 54,542 | 54,862 | |||||||||||||||||||
Clean Harbors • 42 Longwater Drive • PO Box 9149 • Norwell, Massachusetts 02061-9149 • 800.282.0058 • www.cleanharbors.com
CLEAN HARBORS, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
| September 30, 2022 | December 31, 2021 | ||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 449,023 | $ | 452,575 | |||||||
| Short-term marketable securities | 65,034 | 81,724 | |||||||||
| Accounts receivable, net | 1,026,226 | 792,734 | |||||||||
| Unbilled accounts receivable | 134,742 | 94,963 | |||||||||
| Inventories and supplies | 294,220 | 250,692 | |||||||||
| Prepaid expenses and other current assets | 71,846 | 68,483 | |||||||||
| Total current assets | 2,041,091 | 1,741,171 | |||||||||
| Property, plant and equipment, net | 1,923,675 | 1,863,175 | |||||||||
| Other assets: | |||||||||||
| Operating lease right-of-use assets | 161,668 | 161,797 | |||||||||
| Goodwill | 1,246,327 | 1,227,042 | |||||||||
| Permits and other intangibles, net | 621,834 | 644,912 | |||||||||
| Other | 78,032 | 15,602 | |||||||||
| Total other assets | 2,107,861 | 2,049,353 | |||||||||
| Total assets | $ | 6,072,627 | $ | 5,653,699 | |||||||
| Current liabilities: | |||||||||||
| Current portion of long-term debt | $ | 17,535 | $ | 17,535 | |||||||
| Accounts payable | 416,913 | 359,866 | |||||||||
| Deferred revenue | 93,425 | 83,749 | |||||||||
| Accrued expenses and other current liabilities | 405,257 | 391,414 | |||||||||
| Current portion of closure, post-closure and remedial liabilities | 36,904 | 25,136 | |||||||||
| Current portion of operating lease liabilities | 47,879 | 47,614 | |||||||||
| Total current liabilities | 1,017,913 | 925,314 | |||||||||
| Other liabilities: | |||||||||||
| Closure and post-closure liabilities, less current portion | 89,399 | 87,088 | |||||||||
| Remedial liabilities, less current portion | 97,737 | 98,752 | |||||||||
| Long-term debt, less current portion | 2,507,946 | 2,517,024 | |||||||||
| Operating lease liabilities, less current portion | 116,607 | 117,991 | |||||||||
| Deferred tax liabilities | 326,842 | 314,853 | |||||||||
| Other long-term liabilities | 78,602 | 78,790 | |||||||||
| Total other liabilities | 3,217,133 | 3,214,498 | |||||||||
Total stockholders’ equity, net | 1,837,581 | 1,513,887 | |||||||||
Total liabilities and stockholders’ equity | $ | 6,072,627 | $ | 5,653,699 | |||||||
Clean Harbors • 42 Longwater Drive • PO Box 9149 • Norwell, Massachusetts 02061-9149 • 800.282.0058 • www.cleanharbors.com
CLEAN HARBORS, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
| For the Nine Months Ended | |||||||||||
| September 30, 2022 | September 30, 2021 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net income | $ | 329,270 | $ | 154,254 | |||||||
| Adjustments to reconcile net income to net cash from operating activities: | |||||||||||
| Depreciation and amortization | 260,560 | 215,206 | |||||||||
| Allowance for doubtful accounts | 6,684 | 7,186 | |||||||||
| Amortization of deferred financing costs and debt discount | 4,734 | 2,718 | |||||||||
| Accretion of environmental liabilities | 9,599 | 8,625 | |||||||||
| Changes in environmental liability estimates | 2,105 | 341 | |||||||||
| Deferred income taxes | 2,226 | 5,202 | |||||||||
| Other (income) expense, net | (2,073) | 2,509 | |||||||||
| Stock-based compensation | 20,375 | 12,786 | |||||||||
| Gain on sale of business | (8,864) | — | |||||||||
| Environmental expenditures | (9,720) | (12,223) | |||||||||
| Changes in assets and liabilities, net of acquisitions: | |||||||||||
| Accounts receivable and unbilled accounts receivable | (293,562) | (113,601) | |||||||||
| Inventories and supplies | (44,324) | (12,882) | |||||||||
| Other current and non-current assets | (12,600) | (10,785) | |||||||||
| Accounts payable | 52,979 | 86,974 | |||||||||
| Other current and long-term liabilities | 40,153 | 21,916 | |||||||||
| Net cash from operating activities | 357,542 | 368,226 | |||||||||
| Cash flows used in investing activities: | |||||||||||
| Additions to property, plant and equipment | (244,547) | (146,654) | |||||||||
| Proceeds from sale and disposal of fixed assets | 5,118 | 16,424 | |||||||||
| Acquisitions, net of cash acquired | (73,568) | (22,819) | |||||||||
| Proceeds from sale of business, net of transaction costs | 16,811 | — | |||||||||
| Additions to intangible assets including costs to obtain or renew permits | (1,094) | (2,659) | |||||||||
| Proceeds from sale of available-for-sale securities | 51,736 | 83,226 | |||||||||
| Purchases of available-for-sale securities | (36,418) | (96,785) | |||||||||
| Net cash used in investing activities | (281,962) | (169,267) | |||||||||
| Cash flows used in financing activities: | |||||||||||
| Change in uncashed checks | 887 | (4,323) | |||||||||
| Tax payments related to withholdings on vested restricted stock | (6,214) | (7,383) | |||||||||
| Repurchases of common stock | (44,182) | (48,409) | |||||||||
| Deferred financing costs paid | (410) | (150) | |||||||||
| Payments on finance leases | (9,538) | (5,845) | |||||||||
| Principal payments on debt | (13,152) | (5,652) | |||||||||
| Net cash used in financing activities | (72,609) | (71,762) | |||||||||
| Effect of exchange rate change on cash | (6,523) | 365 | |||||||||
| (Decrease) increase in cash and cash equivalents | (3,552) | 127,562 | |||||||||
| Cash and cash equivalents, beginning of period | 452,575 | 519,101 | |||||||||
| Cash and cash equivalents, end of period | $ | 449,023 | $ | 646,663 | |||||||
Clean Harbors • 42 Longwater Drive • PO Box 9149 • Norwell, Massachusetts 02061-9149 • 800.282.0058 • www.cleanharbors.com
| Supplemental information: | |||||||||||
| Cash payments for interest and income taxes: | |||||||||||
| Interest paid | $ | 86,407 | $ | 61,807 | |||||||
| Income taxes paid, net of refunds | 53,183 | 48,202 | |||||||||
| Non-cash investing activities: | |||||||||||
| Property, plant and equipment accrued | 23,726 | 11,561 | |||||||||
| Remedial liability assumed in acquisition of property, plant and equipment | 8,092 | — | |||||||||
| ROU assets obtained in exchange for operating lease liabilities | 39,899 | 18,528 | |||||||||
| ROU assets obtained in exchange for finance lease liabilities | 11,263 | 18,704 | |||||||||
Supplemental Segment Data (in thousands)
| For the Three Months Ended | |||||||||||||||||||||||||||||||||||
| Revenue | September 30, 2022 | September 30, 2021 | |||||||||||||||||||||||||||||||||
| Third-party revenues | Intersegment revenues, net | Direct revenues | Third-party revenues | Intersegment revenues, net | Direct revenues | ||||||||||||||||||||||||||||||
| Environmental Services | $ | 1,080,032 | $ | 6,452 | $ | 1,086,484 | $ | 743,831 | $ | 1,802 | $ | 745,633 | |||||||||||||||||||||||
| Safety-Kleen Sustainability Solutions | 282,771 | (6,452) | 276,319 | 207,589 | (1,802) | 205,787 | |||||||||||||||||||||||||||||
| Corporate Items | 283 | — | 283 | 59 | — | 59 | |||||||||||||||||||||||||||||
| Total | $ | 1,363,086 | $ | — | $ | 1,363,086 | $ | 951,479 | $ | — | $ | 951,479 | |||||||||||||||||||||||
| For the Nine Months Ended | |||||||||||||||||||||||||||||||||||
| Revenue | September 30, 2022 | September 30, 2021 | |||||||||||||||||||||||||||||||||
| Third-party revenues | Intersegment revenues, net | Direct Revenues | Third-party revenues | Intersegment revenues, net | Direct revenues | ||||||||||||||||||||||||||||||
| Environmental Services | $ | 3,105,336 | $ | 19,336 | $ | 3,124,672 | $ | 2,119,856 | $ | 4,476 | $ | 2,124,332 | |||||||||||||||||||||||
| Safety-Kleen Sustainability Solutions | 782,737 | (19,336) | 763,401 | 566,012 | (4,476) | 561,536 | |||||||||||||||||||||||||||||
| Corporate Items | 434 | — | 434 | 217 | — | 217 | |||||||||||||||||||||||||||||
| Total | $ | 3,888,507 | $ | — | $ | 3,888,507 | $ | 2,686,085 | $ | — | $ | 2,686,085 | |||||||||||||||||||||||
| For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||||||
| Adjusted EBITDA | September 30, 2022 | September 30, 2021 | September 30, 2022 | September 30, 2021 | |||||||||||||||||||
| Environmental Services | $ | 260,687 | $ | 166,471 | $ | 713,630 | $ | 482,766 | |||||||||||||||
| Safety-Kleen Sustainability Solutions | 103,156 | 70,810 | 252,043 | 165,756 | |||||||||||||||||||
| Corporate Items | (55,288) | (52,197) | (167,789) | (146,216) | |||||||||||||||||||
| Total | $ | 308,555 | $ | 185,084 | $ | 797,884 | $ | 502,306 | |||||||||||||||
Clean Harbors • 42 Longwater Drive • PO Box 9149 • Norwell, Massachusetts 02061-9149 • 800.282.0058 • www.cleanharbors.com