Clean Harbors Announces Fourth-Quarter and Year-End 2002 Financial Results; Environmental Liabilities From CSD Acquisition Reduced From $266 Million to $203 Million.Business Editors BRAINTREE, Mass.--(BUSINESS WIRE)--April 1, 2003 Clean Harbors, Inc. ("Clean Harbors") (Nasdaq: CLHB CLHB Cardiff Local Health Board (UK) ), the leading provider of hazardous waste Hazardous waste Any solid, liquid, or gaseous waste materials that, if improperly managed or disposed of, may pose substantial hazards to human health and the environment. Every industrial country in the world has had problems with managing hazardous wastes. and environmental management services throughout North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. , today announced financial results for the fourth quarter and year ended December 31, 2002. The fourth quarter is the first full quarter to include results from the Chemical Services Division (CSD CSD Commission on Sustainable Development CSD Serbian Dinar (ISO currency code) CSD Christopher Street Day CSD Circuit Switched Data (Sprint) CSD Computer Science Department CSD Community School District ) that Clean Harbors acquired from Safety-Kleen in September 2002. The Company also announced that its financial statements now reflect that the previously reported $266 million in environmental liabilities it assumed in the CSD acquisition would be reduced to $203 million. The $63 million reduction consists of $23 million due to changes in estimates based on better current information and $40 million resulting from discounts to arrive at fair value as required under purchase accounting. The Company reported fourth-quarter revenues of $153.3 million, a 102% increase compared with $75.8 million in the same quarter in 2001. Net income for the fourth quarter of 2002 is $4.9 million, or $0.29 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, which compares with net income of $3.8 million, or $0.27 per diluted share for the same quarter of the prior year. EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become for the fourth quarter is $18.3 million compared with EBITDA of $11.7 million in the fourth quarter of 2001, which included the effect of the responses to the anthrax anthrax (ăn`thrăks), acute infectious disease of animals that can be secondarily transmitted to humans. It is caused by a bacterium (Bacillus anthracis crisis and the World Trade Center event. For full-year 2002, Clean Harbors reported revenues of $350.1 million, a 39% increase compared with $251.6 million in 2001. In closing the CSD acquisition, the Company recorded a $24.7 million extraordinary item for debt retirement costs. As a result, Clean Harbors reported a net loss for 2002 of $28.2 million and a loss per diluted share of $2.40. Excluding the extraordinary item, Clean Harbors reported a net loss for 2002 of ($3.5) million and a loss per diluted share of $0.40. EBITDA for 2002 was $34.6 million, which includes the deduction of a non-cash environmental expense (including the accretion expense In accounting, accretion expense is the expense created when updating the present value(PV) of a financial instrument. For example, if one originally recognizes the present value of a liability at $650, which has a future value (FV) of $1000, every year one must increase the ), compared with $29.5 million in 2001. The Company reports EBITDA results, which are non-GAAP, as a complement to results provided in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with accounting principles generally accepted in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ) and believes that such information provides an additional measurement of the Company's performance. The Company defines "EBITDA" in accordance with its outstanding loan agreements as net income or loss (as determined in accordance with GAAP), excluding interest, taxes, depreciation and amortization, restructuring charge restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. , and certain extraordinary or non-recurring gains or losses. The following reconciliations of net income (loss) before extraordinary item to EBITDA illustrates the difference between the two measures of operating performance for the fourth quarter and year ended December 31, 2002 (in thousands):
Year Fourth Quarter
-------- --------------
Income (loss) before extraordinary item $(3,533) $4,942
Depreciation and amortization 15,508 5,764
Interest expense, net 12,682 5,202
Provision for income taxes 3,787 1,616
Restructuring 750 --
Other acquisition costs 5,406 813
------- -------
EBITDA $34,600 $18,337
"Our financial results for the fourth quarter were within the updated guidance range that we provided on March 13," said Alan S. McKim, Chairman and Chief Executive Officer of Clean Harbors. "We believe that the reduction in the environmental liabilities that we assumed in the CSD acquisition is a very positive development for the Company and we remain confident in our ability to successfully manage these acquired environmental liabilities because of our experience in applying alternative treatment protocols to contaminated contaminated, v 1. made radioactive by the addition of small quantities of radioactive material. 2. made contaminated by adding infective or radiographic materials. 3. an infective surface or object. sites." The Company also announced today that it is filing a notification with the Securities and Exchange Commission (SEC) to extend the filing date for the Company's Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. , as allowed by SEC Rules, to on or before April 8, 2003. The Company has recently determined that the Series C Preferred Stockholders' option to convert their preferred shares Preferred shares Preferred shares give investors a fixed dividend from the company's earnings and entitle them to be paid before common shareholders. See: Preferred stock. into the Company's common stock must be accounted for separately from the fair value of the preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. without the conversion feature, and the Company needs more time to properly incorporate this into its Form 10-K. This did not have a material effect on financial results for the fourth quarter or full year 2002. Financial Guidance The Company is affirming its previously announced first-quarter 2003 revenue guidance of $140 million to $150 million. Based on Company expectations and current economic conditions, Clean Harbors anticipates its revenue for the full year of 2003 will be in the previously announced range of $670 million to $680 million. The Company remains focused on its previously announced goal of $115 million in EBITDA. The Company will be adopting accounting rule SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System 143, which requires companies to record liabilities for asset retirement. The Company will not be providing updated EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. guidance for the year until it has determined the full effect of SFAS 143. Conference Call Information Clean Harbors will conduct a conference call for investors to discuss the information contained in this news release today, Tuesday, April 1, 2003 at 9:00 a.m. (ET). Investors who want to hear a Webcast of the call should log onto http://www.cleanharbors.com and select "Investor Relations Investor relations The process by which the corporation communicates with its investors. " at least 15 minutes prior to the broadcast. Investors should then follow the instructions provided to assure that the necessary audio applications are downloaded and installed. The call will be available on the investor relations section of http://www.cleanharbors.com for one week. About Clean Harbors, Inc. Clean Harbors, Inc. through its subsidiaries provides a wide range of environmental and waste management services to a diversified diversified (di·verˑ·s customer base including a majority of the Fortune 500 companies, thousands of smaller private entities and numerous governmental agencies. Within its international footprint The amount of geographic space covered by an object. A computer footprint is the desk or floor surface it occupies. A satellite's footprint is the earth area covered by its downlink. See form factor. 1. , Clean Harbors has service and sales offices located in 36 states, six Canadian provinces Noun 1. Canadian province - Canada is divided into 12 provinces for administrative purposes province, state - the territory occupied by one of the constituent administrative districts of a nation; "his state is in the deep south" , Mexico, and Puerto Rico Puerto Rico (pwār`tō rē`kō), island (2005 est. pop. 3,917,000), 3,508 sq mi (9,086 sq km), West Indies, c.1,000 mi (1,610 km) SE of Miami, Fla. , and operates 52 waste management facilities strategically located throughout North America. For more information, visit our Web site at www.cleanharbors.com. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Statement Any statements contained herein that are not historical facts are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995, and involve risks and uncertainties. These forward-looking statements are generally identifiable by use of the words "believes," "expects," "intends," "anticipates," "plans to," "estimates," "projects," or similar expressions. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those reflected in these forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's opinions only as of the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" . The Company undertakes no obligation to revise or publicly release the results of any revision to these forward-looking statements. Information on the potential factors that could affect the Company's actual results of operations is included in its filings with the Securities and Exchange Commission, including but not limited to its Annual Report on Form 10-K for the fiscal year ended December 31, 2001, Form 10-Q Form 10-Q See 10-Q. for the quarter ended September 30, 2002 and on Form 10-K for the fiscal year ended December 31, 2002, which will be filed in April 2003.
CLEAN HARBORS, INC
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Three Months Ended Twelve Months Ended
December 31, December 31,
(unaudited)
-------------------- ----------------------
2002 2001 2002 2001
--------- ------- --------- ---------
Revenues $153,344 $75,824 $350,133 $251,601
Cost of revenues 110,363 51,112 253,412 178,085
Selling, general and
administrative expenses 24,773 13,004 62,250 44,460
Depreciation and
amortization 5,764 2,771 15,508 11,113
Restructuring -- -- 750 --
Other acquisition costs 813 -- 5,406 --
------- -------- -------- --------
Income from operations 11,631 8,937 12,807 17,943
Other income 129 -- 129 --
Interest expense, net 5,202 2,848 12,682 9,991
------- -------- -------- --------
Income before provision
for income taxes and
extraordinary loss 6,558 6,089 254 7,952
Provision for
income taxes 1,616 2,310 3,787 2,412
------- -------- --------- ------
Income (loss) before
extraordinary loss 4,942 3,779 (3,533) 5,540
Extraordinary loss, early
extinguishment of debt -- -- 24,658 --
------- -------- --------- ------
Net income (loss) 4,942 3,779 (28,191) 5,540
Dividends and accretion
on preferred stock 868 112 1,292 448
------- -------- --------- ------
Net income attributable to
common shareholders $ 4,074 $3,667 $(29,483) $5,092
======= ====== ========= ======
Diluted earnings per share
Income (loss) before
extraordinary loss $0.29 $0.27 $(0.40) $0.40
Extraordinary loss, early
extinguishment of debt -- -- (2.02) --
-------- --------- -------- --------
Net income (loss)
attributable to
common shareholders $ 0.29 $ 0.27 $(2.40) $0.40
======== ======== ======= =====
Weighted average
common shares
outstanding plus
potentially dilutive
common shares 16,913 13,421 12,189 12,676
======== ======== ======= ======
CLEAN HARBORS, INC. AND SUBSIDIARIES
SUMMARIZED CONSOLIDATED BALANCE SHEET
(in thousands)
December 31, December 31,
2002 2001
---------------- ------------------
Current assets $190,622 $63,849
Net property, plant and equipment 181,674 53,424
Other assets 187,394 39,685
-------- --------
Total assets $559,690 $156,958
======== ========
Current liabilities $165,723 $53,320
Other liabilities 358,642 54,069
Redeemable preferred stock 13,543 --
Stockholders' equity 21,782 49,569
-------- --------
Total liabilities, redeemable
preferred stock and
stockholders' equity $559,690 $156,958
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