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): March 1, 2023
(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 March 1, 2023, Clean Harbors, Inc. (the “Company”) issued a press release announcing the Company’s results of operations for the fourth quarter and year ended December 31, 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) | |||||
| March 1, 2023 | /s/ Michael L. Battles | ||||
| Executive Vice President and Chief Financial Officer | |||||
2
EXHIBIT 99.1
Press Release
Clean Harbors Announces Fourth-Quarter and
Full-Year 2022 Financial Results
•Posts Q4 Revenue Growth of 14% to $1.28 Billion; Full-Year Revenues of $5.17 Billion
•Generates Q4 Net Income of $82.5 Million, or EPS of $1.52, with Adjusted EPS of $1.44; Full-Year Net Income of $411.7 Million, or EPS of $7.56, with Adjusted EPS of $7.15
•Achieves Q4 Adjusted EBITDA Growth of 29% to $224.2 Million; Generates Full-Year Adjusted EBITDA of $1,022 Million
•Delivers Full-Year Net Cash from Operating Activities of $626.2 Million and Adjusted Free Cash Flow of $289.9 Million
•Provides Full-Year 2023 Adjusted EBITDA and Adjusted Free Cash Flow Guidance
NORWELL, Mass. – March 1, 2023 – Clean Harbors, Inc. (“Clean Harbors”) (NYSE: CLH), the leading provider of environmental and industrial services throughout North America, today announced financial results for the fourth quarter and year ended December 31, 2022.
“We concluded a record 2022 with strong fourth-quarter results, led by our Environmental Services segment,” said Alan S. McKim, Chairman, President and Chief Executive Officer. “Favorable market dynamics continued to drive considerable demand for our disposal and recycling assets, while our broad range of service offerings also performed well in the quarter. Revenues grew $159 million from a combination of pricing and volume. By leveraging that growth and controlling our costs, we delivered Q4 Adjusted EBITDA growth of 29% and improved our margins by 190 basis points from the same period a year ago.”
Fourth-Quarter Results
Revenues increased 14% to $1.28 billion from $1.12 billion in the same period of 2021. Income from operations grew 55% to $127.4 million from $82.2 million in the fourth quarter of 2021.
Net income was $82.5 million, or $1.52 per diluted share. This compared with net income of $49.0 million, or $0.90 per diluted share, for the same period in 2021. Adjusted for certain items in both periods, adjusted net income was $78.5 million, or $1.44 per diluted share, for the fourth quarter of 2022, compared with adjusted net income of $48.6 million, or $0.89 per diluted share, for the same period of 2021. (See reconciliation tables below). Net income and adjusted net income results for the fourth quarter of 2022 included pre-tax integration and severance costs of $0.3 million. Comparable costs in the fourth quarter of 2021 were $8.6 million, reflecting costs associated with the HydroChemPSC acquisition, which was completed in October 2021.
Clean Harbors • 42 Longwater Drive • PO Box 9149 • Norwell, Massachusetts 02061-9149 • 800.282.0058 • www.cleanharbors.com
Adjusted EBITDA (see description below) increased 29% to $224.2 million from $174.3 million in the same period of 2021.
Q4 2022 Segment Review
“Environmental Services (ES) revenues increased 15% year-over-year, and Adjusted EBITDA in the segment rose 35% resulting in a 22.9% margin for the quarter which represents a 340-basis-point improvement over the prior year quarter,” McKim said. “Utilization of our incinerator network was lower than recent quarters at 84% because of unplanned outages at several locations due to severe weather experienced in December. Volumes of higher-value waste streams and overall incineration demand remained strong resulting in a 21% increase in average incineration pricing from a year ago. Landfill volumes increased 28%, along with a small increase in average pricing, as we continued to capture more remediation and waste projects. Our Industrial Services business performed well in the quarter and closed out the year strong with increased customer needs related to the severe weather. Safety-Kleen Environmental revenue grew more than 20% for the third consecutive quarter; demand for its core offerings has now surpassed pre-pandemic levels. Field Services revenue was up 8% from pricing and branch growth initiatives.
“Safety-Kleen Sustainability Solutions (SKSS) revenues grew 9% in the fourth quarter, while Adjusted EBITDA decreased 12% from a year ago,” McKim said. “We experienced a seasonal slowdown in base oil demand in the fourth quarter after a record-breaking third quarter. While our re-refinery spread remained wide, we sold lower volumes of both base oil and blended products as customers depleted their inventories to close out the year. Segment profitability was affected by overall revenue mix and severe weather at multiple locations, which impacted production and resulted in higher costs. We also made investments in the business to accelerate lubricant sales in 2023 and beyond. Waste oil collections were strong in the quarter at 57 million gallons. The new Georgia plant we acquired in June has been running well after initiating multiple throughput enhancements.”
2022 Financial Results
Clean Harbors’ revenues increased 36% to $5.17 billion compared with $3.81 billion in 2021. Income from operations increased 82% to $634.7 million from $347.9 million in 2021.
Net income was $411.7 million, or $7.56 per diluted share, compared with net income of $203.2 million, or $3.71 per diluted share for 2021. Adjusted for certain items in both periods, the Company reported adjusted net income for 2022 of $389.5 million, or $7.15 per diluted share, compared with adjusted net income of $199.6 million, or $3.64 per diluted share, for 2021. (See reconciliation table below). Net income and adjusted net income results for 2022 included pre-tax integration and severance costs of $3.0 million. Comparable costs in 2021 were $19.7 million, with the HPC acquisition representing the largest contributing factor.
Adjusted EBITDA (see description below) increased 51% to $1,022.1 million, compared with Adjusted EBITDA of $676.6 million in 2021, which included $12.0 million of benefits from government assistance
Clean Harbors • 42 Longwater Drive • PO Box 9149 • Norwell, Massachusetts 02061-9149 • 800.282.0058 • www.cleanharbors.com
programs. The Company generated adjusted free cash flow of $289.9 million in 2022, compared with $326.3 million in 2021. The decrease is largely attributable to higher working capital related to our rapid growth and increased capital expenditures including $45 million of spend associated with the construction of our new incinerator in Nebraska.
“2022 was another terrific year for Clean Harbors, from our outstanding safety results to our record financial performance and notable operating achievements,” said McKim. “In safety, we vastly exceeded our goal of delivering a Total Recordable Incident Rate (TRIR) of below 1.0. We concluded the year with a TRIR of 0.73, which is our best annual safety performance by a wide margin, as the team worked diligently to keep themselves and their colleagues safe. Financially, we expanded our Adjusted EBITDA margins by 200 basis points on the strength of a 36% top-line increase and 51% Adjusted EBITDA growth. We generated more than one billion dollars of Adjusted EBITDA for the first time in our history – while improving our ROIC for the fifth consecutive year. On the operational side, we successfully integrated HPC, advanced construction of our next incinerator, acquired our eighth re-refinery facility, launched our KLEEN+ brand in the base oil market, significantly lowered voluntary turnover while increasing the hiring of billable headcount, and issued our ground-breaking PFAS incineration study.”
Business Outlook and Financial Guidance
“We enter 2023 with momentum across all our key businesses,” McKim said. “Within ES, our record backlog of waste and deferred revenue grew during the quarter, which positions us well for this year. Based on the diversity of our customer base, we expect healthy demand for our network of disposal and recycling assets to continue in 2023. Our service businesses all registered robust growth in 2022 and, with the expansion of our billable headcount throughout the year, we should benefit from those hires in 2023. We also expect ample project opportunities this year as monies from the U.S infrastructure bill, the CHIPS act and other programs supporting domestic spending are released. In addition, we expect to benefit from the manufacturing reshoring trend.
“Within SKSS, we continue to closely manage both ends of our re-refining spread and collect the waste oil volumes needed to support our plants. While base oil demand slowed from heightened summer levels in the fourth quarter, we are beginning to experience the normal seasonal pickup in the early part of this year and are confident overall market conditions will remain favorable for 2023. We also see numerous opportunities to enhance our profitability in this segment including raising production from 2022 levels, increasing sales of blended products and capitalizing on growing interest in our sustainable products. Our new KLEEN+ base oil brand is helping to facilitate discussions with customers seeking solutions that lower the environmental impact of their automotive and industrial lubricant products,” McKim concluded.
For the first quarter of 2023, Clean Harbors expects Adjusted EBITDA to increase approximately 20% from the prior year.
Clean Harbors • 42 Longwater Drive • PO Box 9149 • Norwell, Massachusetts 02061-9149 • 800.282.0058 • www.cleanharbors.com
For full-year 2023, Clean Harbors expects:
•Adjusted EBITDA in the range of $1,010 million to $1,050 million or a midpoint of $1,030 million. This range is based on anticipated GAAP net income in the range of $355 million to $391 million; and
•Adjusted free cash flow in the range of $305 million to $345 million, or a midpoint of $325 million, based on anticipated net cash from operating activities in the range of $705 million to $765 million.
Non-GAAP Results
Clean Harbors reports Adjusted EBITDA, which is a non-GAAP financial measure and should not be considered 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 twelve months ended December 31, 2022 and 2021 (in thousands, except percentages):
| For the Three Months Ended | For the Twelve Months Ended | ||||||||||||||||||||||
| December 31, 2022 | December 31, 2021 | December 31, 2022 | December 31, 2021 | ||||||||||||||||||||
| Net income | $ | 82,474 | $ | 48,993 | $ | 411,744 | $ | 203,247 | |||||||||||||||
| Accretion of environmental liabilities | 3,344 | 3,120 | 12,943 | 11,745 | |||||||||||||||||||
| Stock-based compensation | 6,469 | 6,053 | 26,844 | 18,839 | |||||||||||||||||||
| Depreciation and amortization | 87,034 | 82,929 | 347,594 | 298,135 | |||||||||||||||||||
| Other (income) expense, net | (399) | (1,994) | (2,472) | 515 | |||||||||||||||||||
| Loss on early extinguishment of debt | 422 | — | 422 | — | |||||||||||||||||||
| Gain on sale of business | — | — | (8,864) | — | |||||||||||||||||||
| Interest expense, net of interest income | 28,309 | 23,704 | 107,663 | 77,657 | |||||||||||||||||||
| Provision for income taxes | 16,591 | 11,495 | 126,254 | 66,468 | |||||||||||||||||||
| Adjusted EBITDA | $ | 224,244 | $ | 174,300 | $ | 1,022,128 | $ | 676,606 | |||||||||||||||
| Adjusted EBITDA Margin | 17.5 | % | 15.6 | % | 19.8 | % | 17.8 | % | |||||||||||||||
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 loss on early extinguishment of debt, gain on sale of business and 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 twelve months ended December 31, 2022 and 2021 (in thousands, except per share amounts):
| For the Three Months Ended | For the Twelve Months Ended | ||||||||||||||||||||||
| December 31, 2022 | December 31, 2021 | December 31, 2022 | December 31, 2021 | ||||||||||||||||||||
| Adjusted net income | |||||||||||||||||||||||
| Net income | $ | 82,474 | $ | 48,993 | $ | 411,744 | $ | 203,247 | |||||||||||||||
| Loss on early extinguishment of debt | 422 | — | 422 | — | |||||||||||||||||||
| Gain on sale of business | — | — | (8,864) | — | |||||||||||||||||||
| Tax-related valuation allowances and other* | (4,354) | (428) | (13,848) | (3,649) | |||||||||||||||||||
| Adjusted net income | $ | 78,542 | $ | 48,565 | $ | 389,454 | $ | 199,598 | |||||||||||||||
| Adjusted earnings per share | |||||||||||||||||||||||
| Earnings per share | $ | 1.52 | $ | 0.90 | $ | 7.56 | $ | 3.71 | |||||||||||||||
| Loss on early extinguishment of debt | 0.01 | — | 0.01 | — | |||||||||||||||||||
| Gain on sale of business | — | — | (0.16) | — | |||||||||||||||||||
| Tax-related valuation allowances and other* | (0.09) | (0.01) | (0.26) | (0.07) | |||||||||||||||||||
Adjusted earnings per share | $ | 1.44 | $ | 0.89 | $ | 7.15 | $ | 3.64 | |||||||||||||||
* For the three and twelve months ended December 31, 2022, other amounts include ($0.1) million and $1.5 million, or $0.03 per share, of tax impacts from the loss on early extinguishment of debt and gain on sale of business, respectively.
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. 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 twelve months ended December 31, 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 Twelve Months Ended | ||||||||||||||||||||||
| December 31, 2022 | December 31, 2021 | December 31, 2022 | December 31, 2021 | ||||||||||||||||||||
| Adjusted free cash flow | |||||||||||||||||||||||
| Net cash from operating activities | $ | 268,672 | $ | 177,771 | $ | 626,214 | $ | 545,997 | |||||||||||||||
| Additions to property, plant and equipment | (100,509) | (95,202) | (345,056) | (241,856) | |||||||||||||||||||
| Proceeds from sale and disposal of fixed assets | 3,661 | 5,732 | 8,779 | 22,156 | |||||||||||||||||||
| Adjusted free cash flow | $ | 171,824 | $ | 88,301 | $ | 289,937 | $ | 326,297 | |||||||||||||||
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, 2023 | |||||||||||
| Projected GAAP net income | $355 | to | $391 | ||||||||
| Adjustments: | |||||||||||
| Accretion of environmental liabilities | 14 | to | 13 | ||||||||
| Stock-based compensation | 26 | to | 29 | ||||||||
| Depreciation and amortization | 355 | to | 345 | ||||||||
| Loss on early extinguishment of debt | 2 | 2 | |||||||||
| Interest expense, net | 128 | to | 123 | ||||||||
| Provision for income taxes | 130 | to | 147 | ||||||||
| Projected Adjusted EBITDA | $1,010 | to | $1,050 | ||||||||
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, 2023 | |||||||||||
| Projected net cash from operating activities | $705 | to | $765 | ||||||||
| Additions to property, plant and equipment | (410) | to | (430) | ||||||||
| Proceeds from sale and disposal of fixed assets | 10 | to | 10 | ||||||||
| Projected adjusted free cash flow | $305 | to | $345 | ||||||||
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.
Clean Harbors • 42 Longwater Drive • PO Box 9149 • Norwell, Massachusetts 02061-9149 • 800.282.0058 • 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 Twelve Months Ended | ||||||||||||||||||||||
| December 31, 2022 | December 31, 2021 | December 31, 2022 | December 31, 2021 | ||||||||||||||||||||
| Revenues | $ | 1,278,098 | $ | 1,119,481 | $ | 5,166,605 | $ | 3,805,566 | |||||||||||||||
| Cost of revenues: (exclusive of items shown separately below) | 891,424 | 792,183 | 3,543,930 | 2,609,837 | |||||||||||||||||||
| Selling, general and administrative expenses | 168,899 | 159,051 | 627,391 | 537,962 | |||||||||||||||||||
| Accretion of environmental liabilities | 3,344 | 3,120 | 12,943 | 11,745 | |||||||||||||||||||
| Depreciation and amortization | 87,034 | 82,929 | 347,594 | 298,135 | |||||||||||||||||||
| Income from operations | 127,397 | 82,198 | 634,747 | 347,887 | |||||||||||||||||||
| Other income (expense), net | 399 | 1,994 | 2,472 | (515) | |||||||||||||||||||
| Loss on early extinguishment of debt | (422) | — | (422) | — | |||||||||||||||||||
| Gain on sale of business | — | — | 8,864 | — | |||||||||||||||||||
| Interest expense, net | (28,309) | (23,704) | (107,663) | (77,657) | |||||||||||||||||||
| Income before provision for income taxes | 99,065 | 60,488 | 537,998 | 269,715 | |||||||||||||||||||
| Provision for income taxes | 16,591 | 11,495 | 126,254 | 66,468 | |||||||||||||||||||
| Net income | $ | 82,474 | $ | 48,993 | $ | 411,744 | $ | 203,247 | |||||||||||||||
| Earnings per share: | |||||||||||||||||||||||
| Basic | $ | 1.53 | $ | 0.90 | $ | 7.59 | $ | 3.73 | |||||||||||||||
| Diluted | $ | 1.52 | $ | 0.90 | $ | 7.56 | $ | 3.71 | |||||||||||||||
| Shares used to compute earnings per share - Basic | 54,059 | 54,398 | 54,223 | 54,514 | |||||||||||||||||||
| Shares used to compute earnings per share - Diluted | 54,378 | 54,658 | 54,487 | 54,761 | |||||||||||||||||||
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)
| December 31, 2022 | December 31, 2021 | ||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 492,603 | $ | 452,575 | |||||||
| Short-term marketable securities | 62,033 | 81,724 | |||||||||
| Accounts receivable, net | 964,603 | 792,734 | |||||||||
| Unbilled accounts receivable | 107,010 | 94,963 | |||||||||
| Inventories and supplies | 324,994 | 250,692 | |||||||||
| Prepaid expenses and other current assets | 82,518 | 68,483 | |||||||||
| Total current assets | 2,033,761 | 1,741,171 | |||||||||
| Property, plant and equipment, net | 1,980,302 | 1,863,175 | |||||||||
| Other assets: | |||||||||||
| Operating lease right-of-use assets | 166,181 | 161,797 | |||||||||
| Goodwill | 1,246,878 | 1,227,042 | |||||||||
| Permits and other intangibles, net | 620,782 | 644,912 | |||||||||
| Other | 81,803 | 15,602 | |||||||||
| Total other assets | 2,115,644 | 2,049,353 | |||||||||
| Total assets | $ | 6,129,707 | $ | 5,653,699 | |||||||
| Current liabilities: | |||||||||||
| Current portion of long-term debt | $ | 10,000 | $ | 17,535 | |||||||
| Accounts payable | 446,629 | 359,866 | |||||||||
| Deferred revenue | 94,094 | 83,749 | |||||||||
| Accrued expenses and other current liabilities | 396,716 | 391,414 | |||||||||
| Current portion of closure, post-closure and remedial liabilities | 23,123 | 25,136 | |||||||||
| Current portion of operating lease liabilities | 49,532 | 47,614 | |||||||||
| Total current liabilities | 1,020,094 | 925,314 | |||||||||
| Other liabilities: | |||||||||||
| Closure and post-closure liabilities, less current portion | 105,596 | 87,088 | |||||||||
| Remedial liabilities, less current portion | 106,372 | 98,752 | |||||||||
| Long-term debt, less current portion | 2,414,828 | 2,517,024 | |||||||||
| Operating lease liabilities, less current portion | 119,259 | 117,991 | |||||||||
| Deferred tax liabilities | 350,389 | 314,853 | |||||||||
| Other long-term liabilities | 90,847 | 78,790 | |||||||||
| Total other liabilities | 3,187,291 | 3,214,498 | |||||||||
Total stockholders’ equity, net | 1,922,322 | 1,513,887 | |||||||||
Total liabilities and stockholders’ equity | $ | 6,129,707 | $ | 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 Year Ended | |||||||||||
| December 31, 2022 | December 31, 2021 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net income | $ | 411,744 | $ | 203,247 | |||||||
| Adjustments to reconcile net income to net cash from operating activities: | |||||||||||
| Depreciation and amortization | 347,594 | 298,135 | |||||||||
| Allowance for doubtful accounts | 7,783 | 8,018 | |||||||||
| Amortization of deferred financing costs and debt discount | 6,301 | 4,245 | |||||||||
| Accretion of environmental liabilities | 12,943 | 11,745 | |||||||||
| Changes in environmental liability estimates | 8,272 | 2,979 | |||||||||
| Deferred income taxes | 17,549 | 1,482 | |||||||||
| Other (income) expense, net | (2,472) | 515 | |||||||||
| Stock-based compensation | 26,844 | 18,839 | |||||||||
| Gain on sale of business | (8,864) | — | |||||||||
| Loss on early extinguishment of debt | 422 | — | |||||||||
| Environmental expenditures | (13,946) | (15,506) | |||||||||
| Changes in assets and liabilities, net of acquisitions: | |||||||||||
| Accounts receivable and unbilled accounts receivable | (201,087) | (96,551) | |||||||||
| Inventories and supplies | (74,547) | (31,689) | |||||||||
| Other current and non-current assets | (17,303) | 9,268 | |||||||||
| Accounts payable | 74,460 | 108,398 | |||||||||
| Other current and long-term liabilities | 30,521 | 22,872 | |||||||||
| Net cash from operating activities | 626,214 | 545,997 | |||||||||
| Cash flows used in investing activities: | |||||||||||
| Additions to property, plant and equipment | (345,056) | (241,856) | |||||||||
| Proceeds from sale and disposal of fixed assets | 8,779 | 22,156 | |||||||||
| Acquisitions, net of cash acquired | (86,278) | (1,253,232) | |||||||||
| Additions to intangible assets including costs to obtain or renew permits | (1,966) | (3,848) | |||||||||
| Purchases of available-for-sale securities | (49,845) | (129,234) | |||||||||
| Proceeds from sale of available-for-sale securities | 68,611 | 98,412 | |||||||||
| Proceeds from sale of business, net of transactional costs | 16,811 | — | |||||||||
| Net cash used in investing activities | (388,944) | (1,507,602) | |||||||||
| Cash flows (used in) from financing activities: | |||||||||||
| Change in uncashed checks | 552 | (1,806) | |||||||||
| Tax payments related to withholdings on vested restricted stock | (8,801) | (10,805) | |||||||||
| Repurchases of common stock | (50,183) | (54,410) | |||||||||
| Deferred financing costs paid | (410) | (13,737) | |||||||||
| Payments on finance leases | (12,821) | (8,458) | |||||||||
| Principal payments on debt | (115,652) | (7,535) | |||||||||
| Proceeds from issuance of debt, net of discount | — | 995,000 | |||||||||
| Net cash (used in) from financing activities | (187,315) | 898,249 | |||||||||
| Effect of exchange rate change on cash | (9,927) | (3,170) | |||||||||
| Increase (decrease) in cash and cash equivalents | 40,028 | (66,526) | |||||||||
| Cash and cash equivalents, beginning of year | 452,575 | 519,101 | |||||||||
| Cash and cash equivalents, end of year | $ | 492,603 | $ | 452,575 | |||||||
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 | $ | 105,643 | $ | 73,440 | |||||||
| Income taxes paid, net of refunds | 78,526 | 65,192 | |||||||||
| Non-cash investing activities: | |||||||||||
| Property, plant and equipment accrued | 30,950 | 19,264 | |||||||||
| Remedial liability assumed in acquisition of property, plant and equipment | 8,092 | — | |||||||||
Supplemental Segment Data (in thousands)
| For the Three Months Ended | |||||||||||||||||||||||||||||||||||
| Revenue | December 31, 2022 | December 31, 2021 | |||||||||||||||||||||||||||||||||
| Third Party Revenues | Intersegment Revenues (Expense), net | Direct Revenues | Third Party Revenues | Intersegment Revenues (Expense), net | Direct Revenues | ||||||||||||||||||||||||||||||
| Environmental Services | $ | 1,039,637 | $ | 7,397 | $ | 1,047,034 | $ | 906,051 | $ | 2,071 | $ | 908,122 | |||||||||||||||||||||||
| Safety-Kleen Sustainability Solutions | 238,388 | (7,397) | 230,991 | 213,348 | (2,071) | 211,277 | |||||||||||||||||||||||||||||
| Corporate Items | 73 | — | 73 | 82 | — | 82 | |||||||||||||||||||||||||||||
| Total | $ | 1,278,098 | $ | — | $ | 1,278,098 | $ | 1,119,481 | $ | — | $ | 1,119,481 | |||||||||||||||||||||||
| For the Twelve Months Ended | |||||||||||||||||||||||||||||||||||
| Revenue | December 31, 2022 | December 31, 2021 | |||||||||||||||||||||||||||||||||
| Third Party Revenues | Intersegment Revenues (Expense), net | Direct Revenues | Third Party Revenues | Intersegment Revenues (Expense), net | Direct Revenues | ||||||||||||||||||||||||||||||
| Environmental Services | $ | 4,144,973 | $ | 26,733 | $ | 4,171,706 | $ | 3,025,907 | $ | 6,547 | $ | 3,032,454 | |||||||||||||||||||||||
| Safety-Kleen Sustainability Solutions | 1,021,125 | (26,733) | 994,392 | 779,360 | (6,547) | 772,813 | |||||||||||||||||||||||||||||
| Corporate Items | 507 | — | 507 | 299 | — | 299 | |||||||||||||||||||||||||||||
| Total | $ | 5,166,605 | $ | — | $ | 5,166,605 | $ | 3,805,566 | $ | — | $ | 3,805,566 | |||||||||||||||||||||||
| For the Three Months Ended | For the Twelve Months Ended | ||||||||||||||||||||||
| Adjusted EBITDA | December 31, 2022 | December 31, 2021 | December 31, 2022 | December 31, 2021 | |||||||||||||||||||
| Environmental Services | $ | 239,423 | $ | 176,952 | $ | 953,053 | $ | 659,718 | |||||||||||||||
| Safety-Kleen Sustainability Solutions | 54,284 | 61,598 | 306,327 | 227,354 | |||||||||||||||||||
| Corporate Items | (69,463) | (64,250) | (237,252) | (210,466) | |||||||||||||||||||
| Total | $ | 224,244 | $ | 174,300 | $ | 1,022,128 | $ | 676,606 | |||||||||||||||
Clean Harbors • 42 Longwater Drive • PO Box 9149 • Norwell, Massachusetts 02061-9149 • 800.282.0058 • www.cleanharbors.com