I’m pleased to report that Clean Harbors (NYSE: CLH ) has followed through exactly as I predicted in my bullish thesis earlier this year. Since my March publication , the stock has climbed up aroundI am a financial analyst and writer with a strong foundation in financial modeling, valuation, and data analysis. I hold FMVA (Financial Modeling & Valuation Analyst) and BIDA (Business Intelligence & Data Analyst) certifications from the Corporate Finance Institute (CFI) in Canada.The markets fascinate me (we're ...

Clean Harbors, Inc. (CLH) has reported impressive first-quarter 2024 results, wherein earnings and revenues beat the Zacks Consensus Estimate.Better-than-expected earnings impressed investors and the CLH stock has gained 5.9% since the release of results on April 30.CLH’s earnings of $1.09 per share outpaced the Zacks Consensus Estimate by 6.9% but decreased 15.5% from the year-ago quarter. Total revenues of $1.4 billion surpassed the consensus estimate by a slight margin and increased 4% on a year-over-yea ...

Clean Harbors (CLH) FY Conference May 08, 2025 09:45 AM ET Speaker0 Good morning, everyone. Welcome to day four of Oppenheimer's twentieth Annual Industrial Growth Conference. So we're starting off today with a great one, Clean Harbors. We're really delighted to have the management team back at our conference this year, with co CEO, co president Mike Battles, and SVP of IR, Jim Buckley. Gentlemen, welcome. Thanks so much for being here. Speaker1 Hey, Noah. Thanks for having us at the Oppenheimer team. It's ...

Clean Harbors (CLH) Conference Summary Industry Overview - Clean Harbors is the largest hazardous industrial waste service company in North America, focusing primarily on hazardous waste with some medical waste services due to incineration capabilities [4][10] - The waste industry is becoming more integrated, covering solid, industrial, and medical waste [4] Macroeconomic Outlook - The macroeconomic outlook has improved since the beginning of the year, with a strong pipeline and growth observed in April [7][8] - Despite concerns about cyclicality, Clean Harbors has shown resilience, with no signs of customers reducing demand [8][20] Business Segments Environmental Services - The Environmental Services segment has improved margins by 500 basis points over the last six to eight years, attributed to new incinerator capacity, better pricing strategies, and operational efficiencies [10][11] - The company has experienced 12 consecutive quarters of year-over-year EBITDA margin growth in this segment [17] Used Oil and Safety Clean Solutions - The used oil segment has faced profitability challenges post-pandemic, but a shift in strategy to prioritize pricing over volume has led to improved stability [81][86] - The company processes approximately 250 million gallons of used motor oil annually, converting it into base oil [82] Capacity and Market Dynamics - There is ample landfill capacity, but incineration capacity is constrained due to the complex nature of waste streams [28][30] - Clean Harbors has added new incineration capacity and expects this to be absorbed by the market due to ongoing demand [30][34] Regulatory Environment and PFAS - Clean Harbors has introduced a total PFAS solution, which includes testing, remediation, and disposal services, with projected revenue growth of 10% to 20% in this area [64][70] - The company is actively involved in addressing PFAS issues, with a long-term view on regulatory developments and market needs [68][69] Mergers and Acquisitions - The company has expanded its market share through acquisitions, allowing for better pricing discipline and stability in the Environmental Services segment [50][52] - Future M&A strategies will focus on geographic expansion and enhancing capabilities in waste management [53] Conclusion - Clean Harbors is positioned well within the hazardous waste industry, demonstrating resilience against macroeconomic challenges and adapting its business strategies to maintain profitability and growth [17][19][88]

Financial Performance - Total revenues for Q1 2025 reached $1,431,950, an increase of 4.0% compared to $1,376,695 in Q1 2024[13] - Net income for Q1 2025 was $58,680, down 16.0% from $69,832 in Q1 2024[13] - Earnings per share (EPS) for Q1 2025 were $1.09, compared to $1.29 in Q1 2024, reflecting a decrease of 15.5%[13] - Comprehensive income for Q1 2025 was $53,748, down from $65,545 in Q1 2024, a decrease of 18.0%[17] - Adjusted EBITDA for the Environmental Services segment was $274,591,000 for Q1 2025, compared to $264,475,000 in Q1 2024, reflecting an increase of about 4.3%[90] - Total Reportable Segment Adjusted EBITDA for Q1 2025 was $302,843,000, an increase from $294,175,000 in Q1 2024, representing a growth of 2.3%[93] Assets and Liabilities - Total current assets decreased to $2,310,682 as of March 31, 2025, from $2,433,796 at the end of 2024, a decline of 5.0%[11] - Cash and cash equivalents decreased to $489,417 from $687,192, representing a decline of 28.8%[11] - Total liabilities decreased slightly to $4,675,563 as of March 31, 2025, from $4,673,749 at the end of 2024[11] - Total stockholders' equity as of March 31, 2025, was $2,571,224, a slight decrease from $2,573,529 at the end of 2024[11] - As of March 31, 2025, the company had total long-term debt of $2.77 billion, slightly down from $2.79 billion as of December 31, 2024[61] Revenue Segments - Environmental Services segment revenues for the three months ended March 31, 2025, were $1,207.04 million, compared to $1,161.28 million in the same period of 2024, reflecting an increase of about 4%[37] - Safety-Kleen Sustainability Solutions revenues for the three months ended March 31, 2025, were $224.82 million, up from $215.31 million in the prior year, indicating a growth of approximately 4%[37] - Technical Services generated revenues of $426.21 million for the three months ended March 31, 2025, compared to $407.49 million in the same period of 2024, marking an increase of approximately 5%[37] - Industrial Services and Other revenues were $322.46 million for the three months ended March 31, 2025, compared to $359.50 million in the same period of 2024, reflecting a decrease of about 10%[37] - Field and Emergency Response Services revenues were $215.70 million for the three months ended March 31, 2025, compared to $163.47 million in the same period of 2024, indicating a significant increase of approximately 32%[37] Acquisitions - The Company acquired HEPACO on March 22, 2024, for an all-cash purchase price of $392.2 million, enhancing its Environmental Services segment[40] - The Company finalized the purchase accounting for the acquisition of Noble Oil Services, Inc. for an all-cash purchase price of $68.7 million, net of cash acquired[43] - The Company completed the acquisition of three additional privately-owned businesses for a total cash consideration of $17.1 million in 2024[47] Cash Flow and Investments - Cash flows from operating activities were $1,605 for Q1 2025, a significant decrease from $18,549 in Q1 2024[19] - The company reported a net cash used in investing activities of $120,330, compared to $609,873 in Q1 2024[19] - The company repurchased $55,000 in common stock during Q1 2025, compared to $5,000 in Q1 2024[19] Legal and Regulatory Matters - As of March 31, 2025, the Company has been identified as a potentially responsible party for 132 Superfund sites, with potential monetary liability exceeding $1.0 million at three of these sites[83] - The Company has approximately 71 pending product liability cases related to Safety-Kleen's products, with insurance coverage expected to cover most claims, excluding punitive damages[81] - The company has indemnification agreements at 17 of the 126 third-party Superfund sites, which cover liabilities for waste disposed of prior to acquisition[84] Expenses - Selling, general and administrative expenses for the reportable segments totaled $111,630,000 for Q1 2025, compared to $114,633,000 for Q1 2024, indicating a decrease of approximately 2.6%[90] - Interest expense for Q1 2025 was $36,077,000, compared to $28,539,000 in Q1 2024, reflecting a significant increase of 26.4%[93] - Corporate costs for Q1 2025 amounted to $67,989,000, up from $64,080,000 in Q1 2024, indicating an increase of 4.5%[93] Stock and Compensation - Total stock-based compensation cost recognized for the three months ended March 31, 2025, was $7.6 million, an increase from $6.3 million in the same period of 2024[69] - The total fair value of restricted stock vested during the three months ended March 31, 2025, was $15 million, compared to $3.7 million in the prior year[70] - As of March 31, 2025, there was $11.9 million of total unrecognized compensation cost arising from performance stock awards deemed probable of vesting[73]

Core Insights - Clean Harbors reported revenue of $1.43 billion for the quarter ended March 2025, a year-over-year increase of 4% [1] - The company's EPS for the same period was $1.09, down from $1.29 a year ago [1] - The reported revenue exceeded the Zacks Consensus Estimate of $1.42 billion, resulting in a surprise of +0.89% [1] - Clean Harbors delivered an EPS surprise of +6.86%, with the consensus EPS estimate being $1.02 [1] Revenue Breakdown - Environmental Services revenue was $1.21 billion, matching the average estimate from three analysts, representing a year-over-year increase of +3.1% [4] - Safety-Kleen Sustainability Solutions revenue was $222.74 million, exceeding the average estimate of $194.66 million, with a year-over-year change of +9.1% [4] - Corporate Items revenue was $0.10 million, consistent with the average estimate from two analysts, but down -4.9% compared to the year-ago quarter [4] Adjusted EBITDA Performance - Adjusted EBITDA for Environmental Services was $274.59 million, slightly above the estimate of $273.41 million from three analysts [4] - Adjusted EBITDA for Corporate Items was -$67.99 million, compared to the average estimate of -$66.52 million from three analysts [4] - Adjusted EBITDA for Safety-Kleen Sustainability Solutions was $28.25 million, surpassing the estimate of $22.88 million from three analysts [4] Stock Performance - Clean Harbors shares returned +6.6% over the past month, while the Zacks S&P 500 composite experienced a -0.2% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Core Viewpoint - Clean Harbors reported quarterly earnings of $1.09 per share, exceeding the Zacks Consensus Estimate of $1.02 per share, but down from $1.29 per share a year ago, indicating a 15.5% year-over-year decline in earnings [1][2] Financial Performance - The company achieved revenues of $1.43 billion for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 0.89% and showing a year-over-year increase from $1.38 billion [2] - Over the last four quarters, Clean Harbors has surpassed consensus EPS estimates three times and topped revenue estimates four times [2] Stock Performance - Clean Harbors shares have declined approximately 7% since the beginning of the year, compared to a 5.5% decline in the S&P 500 [3] - The current Zacks Rank for Clean Harbors is 3 (Hold), indicating expected performance in line with the market in the near future [6] Earnings Outlook - The consensus EPS estimate for the upcoming quarter is $2.31 on revenues of $1.58 billion, and for the current fiscal year, it is $7.50 on revenues of $6.12 billion [7] - The trend of estimate revisions for Clean Harbors is currently mixed, which may change following the recent earnings report [6] Industry Context - The Waste Removal Services industry, to which Clean Harbors belongs, is currently ranked in the bottom 20% of over 250 Zacks industries, suggesting potential challenges ahead [8]

First-Quarter 2025 Investor Review April 30, 2025 1 Forward Looking Statements and GAAP Disclaimer These slides contain (and the accompanying oral discussion will contain) forward-looking statements, which are generally identifiable by use of the words "believes," "expects," "intends," "anticipates," "plans to," "seeks," "will," "should," "estimates," "projects," "may," "likely," "potential," "outlook" or similar expressions. Such statements may include, but are not limited to, statements about the Company' ...

Financial Data and Key Metrics Changes - Company revenue increased by 4% in Q1, totaling $55 million growth, with the Environmental Services (ES) segment contributing two-thirds of that growth [27][8] - Adjusted EBITDA for Q1 was $235 million, with a margin of 16.4%, slightly down year-over-year but in line with expectations [28][27] - Net income for Q1 was down compared to the same period last year, with earnings per share reported at $1.09 [29] Business Line Data and Key Metrics Changes - The ES segment saw a 3% increase in revenue and a 4% increase in adjusted EBITDA, driven by the acquisition of Hefeco and higher incineration utilization [9][8] - Safety Kleen Environmental Services (SKSS) revenue increased year-over-year, reflecting greater volumes and a shift to a higher Charge for Oil (CFO), although adjusted EBITDA decreased slightly [15][16] - Industrial Services revenue declined by 10% year-over-year due to refinery customers delaying spending and maintenance [12][13] Market Data and Key Metrics Changes - The total recordable incident rate (TRIR) for safety was reported at 0.46, marking the best quarter in the company's history [5][6] - Incineration utilization improved to 88% from 79% in Q1 2024, with incineration pricing rising more than 5% on a mix-adjusted basis [10][11] - The company processed 5,000 tons in its new kiln during Q1, with a goal to process over 28,000 tons for the year [11][19] Company Strategy and Development Direction - The company is focusing on internal and external growth opportunities, with a strong cash balance and low leverage to support its growth strategy [20][22] - There is an emphasis on capitalizing on synergies through M&A while also investing in expanding processing and recycling capabilities [20][21] - The company aims to stabilize the SKSS segment while maximizing the value of its assets and minimizing downside potential [24][22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the demand for services, particularly in disposal and recycling, despite potential impacts from tariffs [22][70] - The company anticipates a strong second half of the year, with a robust pipeline of remediation and waste projects [24][22] - Management remains cautious about the industrial services segment but believes in the long-term prospects due to the necessity of the services provided [24][70] Other Important Information - The company ended Q1 with a cash balance approaching $600 million and a net debt to EBITDA ratio of approximately 2.1 times [29][30] - A credit rating upgrade by Moody's was received during the quarter, reflecting strong financial performance and capital policies [30][29] - Adjusted free cash flow for Q1 was negative $116 million, consistent with the previous year, primarily due to timing of incentive comp payments and seasonal working capital increases [31][30] Q&A Session Summary Question: Impact of weather on ES segment performance - Management indicated that weather negatively impacted Q1 performance, estimating a loss of $10 million to $12 million in EBITDA due to difficult conditions in January [41][42] Question: Guidance for Q2 and refinery turnarounds - Management confirmed that Q2 guidance does not include large-scale emergency response events and expects a better second half with over 150 planned refinery turnarounds [44][45] Question: Cyclicality of the ES segment - Management described the ES segment as recession-resistant, with continued strong growth expected in the second and third quarters [49][50] Question: Update on PFAS revenue growth - Management confirmed a strong pipeline for PFAS solutions, expecting revenue growth in the range of 15% to 20% for the year [59][60] Question: Base oil pricing and inventory status - Management acknowledged pressure on base oil pricing but highlighted successful pricing initiatives that doubled the average price charged for used oil collection [100][101] Question: M&A pipeline and current environment - Management noted that valuations remain high for assets, but the company is actively reviewing multiple deals while being selective [91][92]

Financial Data and Key Metrics Changes - Company revenue increased by 4% in Q1, totaling $55 million, with the Environmental Services (ES) segment accounting for two-thirds of that growth [23][6] - Adjusted EBITDA for Q1 was $235 million, with a margin of 16.4%, down year over year but in line with expectations [24][29] - Net income for Q1 was down compared to the same period last year, with earnings per share of $1.09 [25][29] - Cash and short-term marketable securities approached $600 million at quarter-end, with a net debt to EBITDA ratio of approximately 2.1 times [26][27] Segment Performance Changes - In the ES segment, adjusted EBITDA increased by 4% with a 3% revenue increase, resulting in a 10 basis point margin improvement [7][24] - The Safety Kleen Environmental Services (SKSS) segment saw revenue growth year over year, driven by higher volumes and a shift to a higher charge for oil, despite lower base oil pricing [13][14] - Industrial Services revenue decreased by 10% year over year due to refinery customers delaying spending and maintenance [10][11] Market Data and Key Metrics Changes - The total recordable incident rate (TRIR) was 0.46 in Q1, marking the best quarter in the company's history [5] - Incineration utilization was 88% in Q1, up from 79% in Q1 2024, with incineration pricing rising more than 5% on a mix-adjusted basis [8][9] - The company gathered 58 million gallons of waste oil in Q1, compared to 55 million gallons a year ago [14] Company Strategy and Industry Competition - The company is focused on internal and external growth opportunities, with a strong cash balance and low leverage to support its growth strategy [18][20] - The company is optimistic about its prospects for 2025, citing strong demand for disposal services and a robust pipeline of remediation and waste projects [20][22] - The company is committed to further adjusting pricing and reducing costs to offset inflation and tariff impacts [12][20] Management's Comments on Operating Environment and Future Outlook - Management noted that weather negatively impacted Q1 performance, estimating a loss of $10 million to $12 million in EBITDA due to weather conditions [36][37] - The company remains optimistic about the demand environment, particularly in the ES segment, and expects continued strong growth despite potential economic slowdowns [20][66] - Management emphasized the resilience of the ES segment, stating it is recession-resistant and has a strong backlog of waste and project opportunities [45][66] Other Important Information - The company plans to continue its buyback program, having repurchased nearly 260,000 shares for a total of $55 million in Q1 [28][29] - The company expects adjusted free cash flow for 2025 to be in the range of $430 million to $490 million, representing a nearly 30% increase from 2024 [32] Q&A Session Summary Question: Impact of weather on ES segment performance - Management acknowledged that weather had a significant impact in January, estimating a loss of $10 million to $12 million in EBITDA due to adverse conditions, but noted strong recovery in March [36][37] Question: Expectations for refinery turnarounds in Industrial Services - Management indicated that over 150 turnarounds are planned for the second half of the year, expecting a better performance in that segment [40][41] Question: Cyclicality of the ES segment - Management stated that the ES segment is recession-resistant, with continued strong growth expected in the second and third quarters [44][66] Question: Update on PFAS revenue growth - Management expressed confidence in achieving 15% to 20% revenue growth for PFAS-related services this year, supported by a strong regulatory framework [54][55] Question: Base oil pricing and inventory status - Management noted that base oil pricing has been under pressure but highlighted successful pricing initiatives that have offset some of the challenges [94][96]