Clean Harbors Announces Third Quarter 2004 Financial Results.BRAINTREE, Mass. -- Company Achieves High End of Revenue and 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 Guidance; Ongoing Initiatives Drive 74% Increase in Operating Income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. and 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. 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. of $0.25 Clean Harbors, Inc. ("Clean Harbors") (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : CLHB CLHB Cardiff Local Health Board (UK) ), the leading provider of environmental and 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. 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 third quarter ended September 30, 2004. Clean Harbors reported third-quarter 2004 revenues of $162.7 million, compared with $151.1 million in the third quarter of 2003. Income from operations for the third quarter of 2004 totaled $11.2 million, compared with $6.5 million in the third quarter of 2003. The Company generated net income of $4.4 million, or $0.25 per diluted share, for the third quarter of 2004. This compares with third-quarter 2003 net income of $7.4 million, which included a non-recurring, non-cash gain of $8.7 million associated with the embedded Inserted into. See embedded system. derivative on the Company's Series C 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. . Diluted loss per share for the third quarter of 2003 was $(0.09). Clean Harbors' Series C preferred stock was redeemed re·deem tr.v. re·deemed, re·deem·ing, re·deems 1. To recover ownership of by paying a specified sum. 2. To pay off (a promissory note, for example). 3. in June 2004, eliminating its bottom-line effect for future quarters. Revenues for the nine months ended September 30, 2004 were $467.0 million, compared with $465.4 million for the comparable period a year ago. The Company's revenues for the nine months ended September 30, 2003 included one-time revenues approximating $20 million associated with the clean-up of a major oil spill oil spill: see water pollution. on Cape Cod Cape Cod, narrow peninsula of glacial origin, 399 sq mi (1,033 sq km), SE Mass., extending 65 mi (105 km) E and N into the Atlantic Ocean. It is generally flat, with sand dunes, low hills, and numerous lakes. , Massachusetts. Operating income for the first nine months of 2004 grew more than 300 percent to $24.5 million versus $6.1 million in the comparable period of 2003. EBITDA (see below) increased by 18% to $19.6 million in the third quarter of 2004 from $16.6 million in the same period a year earlier. Comments on the Third Quarter "Clean Harbors capitalized on strong seasonal demand, secured new facility projects and continued improving its productivity throughout the organization in the third quarter," said Alan McKim, Chief Executive Officer. "We delivered excellent financial results across all of our primary metrics metrics Managed care A popular term for standards by which the quality of a product, service, or outcome of a particular form of Pt management is evaluated. See TQM. . A recovering economy and our success in marketing additional services to customers in select verticals led to increased demand for our services. In addition, volumes at our landfills grew to improved levels on the strength of facility projects initiatives and our ability to generate new and repeat business with Fortune 500 companies. Utilization at our incinerators was strong despite the planned shutdowns for routine annual maintenance and final upgrades related to MACT MACT Maximum Achievable Control Technology MACT Maximum Available Control Technology MACT Men of All Colors Together MACT Minnesota Association of Community Theatres MACT Maulana Azad College of Technology (Bhopal, India) standards." "In the third quarter, Clean Harbors also continued to make substantial operational progress," McKim said. "Employee utilization improved as we generated higher revenues with minimal increases in headcount. On the expense front, we continued to benefit from the internalization Internalization A decision by a brokerage to fill an order with the firm's own inventory of stock. Notes: When a brokerage receives an order they have numerous choices as to how it should be filled. of waste and transportation costs. Each of these accomplishments helped drive noticeable improvements in both operating income and EBITDA during the quarter." Non-GAAP Third Quarter Results Clean Harbors 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 credit agreements, as described in the following reconciliation showing the differences between reported income and EBITDA for the third quarter of 2004 and the third quarter of 2003 (in thousands):
For the three months ended:
September 30, September 30,
2004 2003
------------------------------
Net income $4.4 $7.4
Accretion of environmental
liabilities 2.5 2.8
Depreciation and amortization 5.8 6.8
Interest expense, net 5.6 6.0
Provision for income taxes 1.1 1.7
Non-recurring severance charges -- 0.6
Gain on sale in fixed assets 0.1 --
Refinancing related expenses 0.1 --
Change in value of embedded
derivative -- (8.7)
------------------------------
EBITDA $19.6 $16.6
==============================
Business Outlook "We were successful in our strategy to increase our share of the environmental services The various combinations of scientific, technical, and advisory activities (including modification processes, i.e., the influence of manmade and natural factors) required to acquire, produce, and supply information on the past, present, and future states of space, atmospheric, market while continuing to streamline costs," said McKim. "We will continue this work in the fourth quarter as we strive to maintain high utilization at our landfill and incineration incineration the act of burning to ashes. facilities, internalize internalize To send a customer order from a brokerage firm to the firm's own specialist or market maker. Internalizing an order allows a broker to share in the profit (spread between the bid and ask) of executing the order. additional transportation costs, further improve employee productivity and generate stronger earnings. As a result of our ongoing initiatives and improved market conditions, we expect to achieve 8% to 10% year-over-year revenue growth in the fourth quarter and EBITDA in the range of $17.5 to $21.0 million. Going forward, we also intend to actively pursue small accretive acquisitions Accretive Acquisition An acquisition that will increase the acquiring company's EPS. Notes: As they are expected to increase the acquiring company's future earnings, these acquisitions tend to be favorable for the company's market price. that provide access to new customers and/or technologies." Conference Call Information Clean Harbors will conduct a conference call for investors to discuss the information contained in this news release today, Thursday, November 4, 2004 at 9:00 a.m. (ET). Investors who want to hear a webcast of the call should log onto www.cleanharbors.com and select "Investor Relations Investor relations The process by which the corporation communicates with its investors. ." The call will be available on the investor relations section for one week. About Clean Harbors, Inc. Clean Harbors, Inc. is North America's leading provider of environmental and hazardous waste management services. With an unmatched infrastructure of 48 waste management facilities, including nine landfills, five incineration locations and seven wastewater treatment centers, the Company provides essential services to more than 30,000 customers, including more than 175 Fortune 500 companies, thousands of smaller private entities and numerous federal, state and local governmental agencies. Headquartered in Braintree, Massachusetts For geographic and demographic information on the census-designated place Braintree, please see the article Braintree (CDP), Massachusetts. Braintree is a town in Norfolk County, Massachusetts, United States. The population was 33,828 at the 2000 census. , Clean Harbors has more than 100 locations strategically positioned throughout North America in 36 U.S. states A U.S. state is any one of the fifty subnational entities of the United States, although four states use the official title "commonwealth". The separate state governments and the federal government share sovereignty, in that an American is a citizen both of the federal entity and , 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. . For more information, visit 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. A variety of factors beyond the control of the Company affect the Company's performance, including, but not limited to: --The effects of general economic conditions in the United States, Canada and other territories and countries where the Company does business; --The effect of economic forces and competition in specific marketplaces where the Company competes; --The possible impact of new regulations or laws pertaining per·tain intr.v. per·tained, per·tain·ing, per·tains 1. To have reference; relate: evidence that pertains to the accident. 2. to all activities of the Company's operations; --The outcome of litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. or threatened litigation or regulatory actions; --The effect of commodity pricing on overall revenues and profitability; --Possible fluctuations in quarterly or annual results or adverse impacts on the Company's results caused by the adoption of new accounting standards or interpretations or regulatory rules and regulations; --The effect of weather conditions or other aspects of the forces of nature on field or facility operations; --The effects of industry trends in the environmental services and waste handling marketplace; --The effects of conditions in the financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. industry on the availability of capital and financing; --The Company's ability to successfully complete the integration of the 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 acquisition, which became effective in September 2002 and to manage the significant environmental liabilities which it assumed in connection with that acquisition; --The availability and costs of liability insurance and financial assurance required by governmental entities relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc our facilities. Any of the above factors and numerous others not listed nor foreseen fore·see tr.v. fore·saw , fore·seen , fore·see·ing, fore·sees To see or know beforehand: foresaw the rapid increase in unemployment. may adversely impact the Company's financial performance. Additional 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 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. , in its entirety The whole, in contradistinction to a moiety or part only. When land is conveyed to Husband and Wife, they do not take by moieties, but both are seised of the entirety. and specifically Factors That May Affect Future Results under Item 7, for the fiscal year ended December 31, 2003, and its subsequent reports on Form 10-Q Form 10-Q See 10-Q. , which are filed with the SEC.
CLEAN HARBORS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited
(in thousands except per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
----------------------------------------
2004 2003 2004 2003
----------------------------------------
Revenues $162,650 $151,085 $467,038 $465,425
Cost of revenues 116,835 108,687 340,137 347,098
Selling, general and
administrative expenses 26,227 26,409 77,225 84,209
Accretion of environmental
liabilities 2,546 2,745 7,753 8,261
Depreciation and amortization 5,803 6,788 17,464 19,875
Restructuring -- -- -- (124)
--------- --------- --------- ----------
Income from operations 11,239 6,456 24,459 6,106
Other income (expense) (85) 8,755 (1,189) 8,909
Loss on refinancing -- -- (7,099) --
Interest (expense), net (5,576) (6,048) (16,377) (17,537)
--------- --------- --------- ----------
Income (loss) before provision
for income taxes and
cumulative effect of change
in accounting principle 5,578 9,163 (206) (2,522)
Provision for income taxes 1,137 1,746 4,663 3,996
--------- --------- --------- ----------
Net income (loss) before
cumulative effect of change
in accounting principle 4,441 7,417 (4,869) (6,518)
Cumulative effect of change in
accounting principle, net of
tax -- -- -- 66
--------- --------- --------- ----------
Net income (loss) 4,441 7,417 (4,869) (6,584)
Redemption of Series C
preferred stock and dividends
and accretion on preferred
stock 112 828 11,728 2,446
--------- --------- --------- ----------
Net income (loss) attributable
to common shareholders $4,329 $6,589 $(16,597) $(9,030)
========= ========= ========= ==========
Basic earnings (loss) per
share:
Earnings (loss) before
cumulative effect of change
in accounting principle $0.31 $0.48 $(1.18) $(0.67)
========= ========= ========= ==========
Cumulative effect of change
in accounting principle,
net of tax $-- $-- $-- $--
========= ========= ========= ==========
Earnings (loss) attributable
to common shareholders $0.31 $0.48 $(1.18) $(0.67)
========= ========= ========= ==========
Diluted earnings (loss) per
share:
Earnings (loss) before
cumulative effect of change
in accounting principle $0.25 $(0.09) $(1.18) $(1.02)
========= ========= ========= ==========
Cumulative effect of change
in accounting principle,
net of tax $-- $-- $-- $--
========= ========= ========= ==========
Earnings (loss) attributable
to common shareholders $0.25 $(0.09) $(1.18) $(1.02)
========= ========= ========= ==========
Weighted average common shares
outstanding 14,108 13,770 14,038 13,443
========= ========= ========= ==========
Weighted average common shares
outstanding plus potentially
dilutive common shares 17,446 16,187 14,038 15,860
========= ========= ========= ==========
CLEAN HARBORS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
(dollars in thousands)
September 30, December 31,
2004 2003
-------------- --------------
(Unaudited)
Current assets:
Cash and cash equivalents $24,756 $6,331
Restricted cash 381 ---
Accounts receivable, net 117,817 114,429
Unbilled accounts receivable 9,509 9,476
Deferred costs 5,506 5,395
Prepaid expenses 10,731 8,582
Supplies inventories 9,449 9,018
Deferred tax asset 182 178
Properties held for sale 12,334 12,690
-------------- --------------
Total current assets 190,665 166,099
-------------- --------------
Property, plant, and equipment, net 174,978 166,542
-------------- --------------
Other assets:
Restricted cash --- 88,817
Deferred financing costs 9,316 6,297
Goodwill 19,032 19,032
Permits and other intangibles, net 76,699 79,811
Deferred tax asset 6,738 6,594
Other 8,165 6,967
-------------- --------------
Total other assets 119,950 207,518
-------------- --------------
Total assets $485,593 $540,159
============== ==============
CLEAN HARBORS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK
AND STOCKHOLDERS' EQUITY
(dollars in thousands)
September 30, December 31,
2004 2003
-------------- --------------
(Unaudited)
Current liabilities:
Uncashed checks $5,897 $5,983
Revolving credit facility --- 35,291
Current portion of capital lease
obligations 1,502 1,207
Accounts payable 61,685 60,611
Accrued disposal costs 2,932 2,021
Deferred revenue 23,768 22,799
Other accrued expenses 36,792 32,240
Current portion of environmental
liabilities 18,779 21,282
Income taxes payable 6,306 2,623
-------------- --------------
Total current liabilities 157,661 184,057
-------------- --------------
Other liabilities:
Environmental liabilities, less
current portion 163,418 161,849
Long-term obligations, less current
maturities 148,083 147,209
Capital lease obligations, less
current portion 3,700 3,412
Other long-term liabilities 8,747 18,055
Accrued pension cost 649 633
-------------- --------------
Total other liabilities 324,597 331,158
-------------- --------------
Commitments and contingent liabilities
Redeemable Series C Convertible
Preferred Stock -- 15,631
Stockholders' equity: 3,335 9,313
-------------- --------------
Total liabilities, redeemable
convertible preferred stock and
stockholders' equity $485,593 $540,159
============== ==============
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