Key Takeaways CLH beat Q4 estimates with $1.62 EPS and $1.49B revenues, up 4.5% and 4.8% year over year, respectively.ES revenues rose 6.3%, while SKSS sales fell 3.6% due to base oil pricing headwinds.CLH guides 2026 adjusted EBITDA of $1.20B-$1.26B and GAAP net income of $410M-$461M.Clean Harbors, Inc. (CLH) reported better-than-expected fourth-quarter 2025 results, with both earnings and revenues beating the Zacks Consensus Estimate. However, the positive results did not affect investor sentiment as the ...

Core Insights - Clean Harbors Inc. is a leading provider of environmental, energy, and industrial services in North America, specializing in hazardous waste management and industrial cleaning, competing with major players like Waste Management and Republic Services [1] Financial Performance - Clean Harbors reported earnings per share of $1.62 for the quarter, exceeding analysts' expectations of $1.61, with a return on equity of 14.61% and a net margin of 6.51% [3][6] - The company's revenue for the quarter was $1.5 billion, surpassing forecasts of $1.46 billion, representing a 4.8% increase from the same quarter last year [3] Stock Performance - The stock recently reached a 52-week high of $284.57, with the last traded price at $281.45, indicating strong investor interest and confidence [2][6] - The trading volume was 62,414 shares, up from a previous close of $269.08, reflecting positive market sentiment [2] Valuation Metrics - Clean Harbors has a price-to-earnings (P/E) ratio of approximately 38.74, indicating that investors are willing to pay a premium for its earnings [4] - The price-to-sales ratio is about 2.53, and the enterprise value to sales ratio is around 2.97, reflecting the company's market value relative to its sales [4] - The enterprise value to operating cash flow ratio is approximately 20.65, showing the company's valuation in relation to its cash flow from operations [4] Financial Health - The company maintains a debt-to-equity ratio of approximately 1.26, indicating a balanced approach to financing its assets [5] - A current ratio of around 2.33 suggests a strong ability to cover short-term liabilities with short-term assets [5]

Core Viewpoint - Depot Connect International (DCI) has entered into a definitive agreement to sell its Industrial Services and Rail Services business to Clean Harbors for approximately $130 million, marking a strategic move to streamline its portfolio and focus on core operations [1]. Group 1: Transaction Details - The sale includes five strategic locations across Ohio, Louisiana, and Texas and is expected to close in the first half of 2026, pending customary closing conditions [1]. - The divestiture is part of DCI's long-term strategy to enhance its core business functions and reinvest in its depot network and specialized services [1]. Group 2: Future Collaboration - Post-sale, DCI will maintain a collaborative relationship with Clean Harbors, continuing to provide tank trailer cleaning and maintenance services at major facilities in Baton Rouge, Louisiana, and Pasadena, Texas [1]. - Both companies will sustain an active partnership for essential transportation services and wastewater treatment, ensuring a smooth transition for customers [1]. Group 3: Company Profiles - Depot Connect International is a leading provider of mission-critical services to the transportation industry, specializing in tank trailer cleaning, maintenance, and container solutions [1]. - Clean Harbors is North America's leading provider of environmental and industrial services, with annual revenues of approximately $6 billion and a diverse customer base, including many Fortune 500 companies [1].

Clean Harbors Inc (NYSE:CLH) reported better-than-expected fourth-quarter financial results on Wednesday.Clean Harbors reported quarterly earnings of $1.62 per share which beat the analyst consensus estimate of $1.61 per share. The company reported quarterly sales of $1.500 billion which beat the analyst consensus estimate of $1.466 billion.Clean Harbors shares gained 2.7% to close at $276.25 on Wednesday.These analysts made changes to their price targets on Clean Harbors following earnings announcement.Nee ...

Revenue Performance - Total direct revenues for 2025 increased by 2.4% or $140.9 million to $6,030.8 million, compared to $5,890.0 million in 2024[219]. - Environmental Services segment direct revenues rose by $188.5 million or 3.8% in 2025, driven by growth in Technical Services and Field and Emergency Response services[219]. - Safety-Kleen Sustainability Solutions segment revenues decreased by $47.4 million in 2025 due to lower market pricing for oil products and reduced volumes sold[219]. - Environmental Services direct revenues for the year ended December 31, 2025, increased by $188.5 million to $5,193.3 million, a growth of 3.8% compared to 2024[228]. - Technical services revenue contributed $126.2 million to the revenue increase, driven by stronger volumes at incinerator and landfill facilities[228]. - Safety-Kleen branch revenues increased by $67.3 million, primarily due to improved pricing for containerized waste and parts washer services[228]. Profitability Metrics - Adjusted EBITDA for 2025 was $1,169.9 million, an increase of 4.7% from $1,116.9 million in 2024, primarily driven by the Environmental Services segment[221]. - Environmental Services segment Adjusted EBITDA was $1,343.8 million in 2025, reflecting a 6.0% increase from 2024[222]. - Safety-Kleen Sustainability Solutions segment Adjusted EBITDA decreased by 6.5% to $137.5 million in 2025[222]. - Net income for 2025 was $391.0 million, a decrease of $11.3 million or 2.8% compared to $402.3 million in 2024[220]. - Adjusted EBITDA for 2025 was $1,169,939, representing a 4.0% increase from $1,116,934 in 2024, and 19.4% of direct revenues[253]. Cash Flow and Investments - Net cash from operating activities for 2025 was $866.7 million, an increase of $89.0 million from 2024, attributed to improved working capital and lower environmental expenditures[221]. - Adjusted free cash flow for 2025 was $509.3 million, representing a $151.4 million increase over 2024[221]. - Net cash used in investing activities decreased to $425.786 million in 2025, down $477.9 million from $903.674 million in 2024, mainly due to reduced acquisition costs[269]. - Net cash used in financing activities for 2025 was $309.342 million, compared to a net cash inflow of $377.032 million in 2024, driven by increased stock repurchases[271]. Costs and Expenses - Total cost of revenues for 2025 was $4,144.6 million, an increase of 2.0% from $4,061.4 million in 2024[222]. - Environmental Services cost of revenues for 2025 increased by $96.0 million to $3,461.9 million, but improved as a percentage of revenues to 66.7%[235]. - SG&A expenses for Environmental Services in 2025 rose by $16.3 million to $387.5 million, representing 7.5% of direct revenues[240]. - Cost of revenues for Safety-Kleen in 2025 decreased by $32.3 million to $626.9 million, remaining consistent at 74.9% of direct revenues[237]. Taxation and Legal Matters - The provision for income taxes for 2025 increased by $5.8 million to $136.993 million, with an effective tax rate of 25.9%, up from 24.6% in 2024[263]. - The company had reserves of $16.2 million for legal matters as of December 31, 2025, including $11.4 million related to pending legal or administrative proceedings[306]. Environmental Liabilities - Total environmental liabilities decreased to $230.697 million in 2025, down $10.836 million from $241.533 million in 2024, primarily due to expenditures and reduced liability estimates[284]. - Landfill final closure and post-closure liabilities recorded at December 31, 2025, were $59.8 million, compared to $59.4 million in 2024[294]. - Non-landfill closure and post-closure liabilities recorded at December 31, 2025, were $75.6 million, an increase from $70.4 million in 2024[296]. - Remedial liabilities recorded at December 31, 2025, were $95.4 million, down from $111.7 million in 2024[297]. Debt and Financing - As of December 31, 2025, the company held $1,260.0 million in variable rate debt under secured senior term loans due in 2032, with an interest rate margin of 1.50%[309]. - The company entered into interest rate swap agreements in 2022, resulting in an effective annual interest rate of approximately 3.46% on $600.0 million of the 2032 Term Loans[310]. - The total borrowings as of December 31, 2025, included $2,805.0 million in long-term debt, with scheduled maturities extending to 2033[312]. - Interest payments on the $600.0 million secured senior term loan, effectively fixed by the 2022 Swaps, are approximately $1.7 million per month[314]. - The company has a revolving credit agreement with a maximum borrowing capacity of $600.0 million, with $453.5 million available to borrow as of December 31, 2025[315]. Other Financial Metrics - Stock-based compensation increased by $4.7 million in 2025, totaling $32,702, driven by performance metrics and the Employee Stock Purchase Plan[254]. - Depreciation and amortization rose by $45.1 million in 2025, totaling $446,006, due to new acquisitions and asset placements[256]. - Interest expense, net of interest income, increased by $8.1 million in 2025, totaling $143,104, primarily due to lower capitalized interest[260]. - Other income (expense), net, improved to $5,200 in 2025 from a loss of $1,454 in 2024[258].

Core Insights - The company achieved record annual revenue exceeding $6 billion, driven by 15 consecutive quarters of year-over-year adjusted EBITDA margin growth in Environmental Services [1] - Performance was supported by disciplined pricing that outpaced inflation, improved workforce productivity, and enhanced network efficiency across disposal and recycling channels [1] - Environmental Services growth of 6% was fueled by high demand for technical services, project volumes, and a significant increase in landfill volumes, which rose more than 50% in Q4 [1] Business Model Resilience - Management attributed the resiliency of the business model to a diverse range of service offerings and industry verticals, which mitigated near-term industrial market headwinds [1] - The successful first-year ramp-up of the Kimball incinerator and the creation of the Phoenix hub provided critical infrastructure to support complex waste processing [1] Margin Improvement and Employee Stability - Safety-Kleen Sustainability Solutions (SKSS) improved margins by 310 basis points despite a weakening base oil market by aggressively raising 'charge for oil' (CFO) rates by approximately 50% over Q3 averages [1] - The company reduced voluntary employee turnover by 150 basis points to a five-year low, which management identifies as a key driver for operational stability and cost savings [1]

Industry Overview - The Waste Management industry is witnessing positive trends due to government regulations, advanced technology adoption, and increased environmental awareness, with a projected 6.6% CAGR through 2031 [1] - The industry is categorized into segments based on waste type, including industrial, commercial, domestic, and agricultural waste, with industrial waste gaining significance due to ongoing industrial expansion [3] - The Disposal services segment is the primary revenue-generating category, driven by the growing need for waste recycling [3] Environmental and Technological Impact - Waste management is integral to Environmental, Social, and Governance (ESG) goals, with an average ESG disclosure score of 50-60% for the industry, aligning with consumer and investor demands for sustainability [4] - Technology, particularly AI, is crucial for improving waste sorting and management, leading to more effective and eco-friendly practices [5] - Waste-to-Energy (WTE) technologies are expected to grow from $37.3 billion in 2025 to $51.7 billion by 2034, with a CAGR of 3.6%, driven by increased waste generation and a focus on sustainable living [6] Financial Performance and Challenges - The Zacks Waste Removal Services industry has seen a 3.7% decline over the past year, underperforming compared to the S&P 500's 15% rally [10] - The industry is currently trading at an EV-to-EBITDA ratio of 12.84X, lower than the S&P 500's 17.7X, indicating potential valuation opportunities [13] - Rising operating costs due to the complexity of waste management processes are putting pressure on companies' bottom lines [7] Company Highlights - **Casella Waste Systems (CWST)**: The company is focused on solid waste pricing strength and has automated 60% of its trucks, leading to improved operational efficiencies. CWST has a strong balance sheet with $193 million in cash and a current ratio of 1.51 [17][18][19] - **Republic Services, Inc. (RSG)**: RSG is investing in new technologies and AI to enhance service delivery and productivity. The company plans to invest $1 billion in acquisitions in 2026, which could strengthen its competitive position [23][25][26] - **Clean Harbors (CLH)**: CLH's growth is supported by pricing gains and increased productivity, particularly in PFAS solutions, which are expected to generate $100-$120 million in revenues in 2025. The company has a strong liquidity position with a current ratio of 2.44 [29][30][31]

Core Insights - Clean Harbors reported record financial and safety performance for 2025, with significant growth in revenue and adjusted EBITDA, alongside a strong safety record [4][6][3] Financial Performance - Clean Harbors achieved over $6 billion in annual revenue for the first time, with adjusted EBITDA increasing by 5% year-over-year, driven primarily by Environmental Services [2][6] - The adjusted EBITDA margin improved by 40 basis points year-over-year, reaching a consolidated Q4 adjusted EBITDA margin of 18.6% [2][16] - Operating cash flow in Q4 grew by 17% to a record $355 million, while adjusted free cash flow also reached a record $261 million for the quarter [17] Safety Performance - The company achieved a total recordable incident rate (TRIR) of 0.49 in 2025, which is considered industry-leading and significantly lower than the previous year [3][6] Operational Milestones - Key operational milestones for 2025 included the ramp-up of the new Kimball Incinerator, the creation of the Phoenix Hub, and handling nearly 22,000 emergency response events [1][4] Capital Allocation and Guidance - Clean Harbors plans to acquire DCI environmental businesses for approximately $130 million and expand its vacuum truck fleet by $50 million [5][14] - For 2026, the company guided adjusted EBITDA between $1.20 billion and $1.26 billion, implying about 5% growth, and adjusted free cash flow between $480 million and $540 million [5][18] Segment Performance - Environmental Services revenue increased by 6% in Q4, attributed to demand for disposal and recycling services, project volumes, and emergency response work [6][10] - Safety-Kleen Environmental Services revenue rose by 7%, driven by pricing and higher volumes, particularly in vacuum services [10] PFAS Growth Opportunity - The company anticipates considerable momentum in PFAS services, with a projected revenue growth of 20% for 2026, supported by a recent incineration study with the EPA [8][9]

Core Insights - Clean Harbors reported revenue of $1.5 billion for the quarter ended December 2025, reflecting a year-over-year increase of 4.8% and surpassing the Zacks Consensus Estimate of $1.48 billion by 1.38% [1] - The company's EPS for the quarter was $1.62, up from $1.55 in the same quarter last year, exceeding the consensus EPS estimate of $1.59 by 1.76% [1] Revenue Breakdown - Environmental Services revenue was $1.3 billion, exceeding the average estimate of $1.28 billion from three analysts, representing a year-over-year increase of 6.1% [4] - Safety-Kleen Sustainability Solutions revenue was reported at $198.85 million, slightly above the average estimate of $197.91 million, but showed a year-over-year decline of 3.2% [4] Adjusted EBITDA Performance - Adjusted EBITDA for Safety-Kleen Sustainability Solutions was $29.95 million, surpassing the average estimate of $28.64 million [4] - Adjusted EBITDA for Environmental Services was $335.76 million, exceeding the average estimate of $328.74 million [4] - Adjusted EBITDA for Corporate Items was reported at -$87.03 million, which was below the average estimate of -$84.26 million [4] Stock Performance - Clean Harbors shares have returned +5% over the past month, contrasting with a -1.3% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Core Insights - Clean Harbors reported Q4 revenue of $1.50 billion, a 4.8% increase year over year, and full-year 2024 revenue of $6.03 billion, up 2.4% year over year [1] - Q4 net income was $86.6 million, up 3.1% year over year, while full-year net income decreased by 2.8% to $391 million [1] - The company achieved record adjusted free cash flow of $509.3 million for the year [1] Financial Performance - Environmental services segment revenue increased by 6% quarter over quarter, with field services revenue up 13% due to $30 million in emergency response activities [1] - The company handled 22,000 emergency response events in 2025, a 5% increase year over year [1] - Safety-Kleen's oil re-refining business showed improvement, with adjusted earnings before income, taxes, depreciation, and amortization increasing in Q4 year over year [1] Operational Highlights - Incinerator utilization rate for the year was 87%, excluding the Kimball incinerator, which is expected to handle higher volumes and complex waste streams [1] - Clean Harbors is investing $50 million into its vacuum truck fleet to capitalize on growth opportunities in the Safety-Kleen branch [1] M&A Activity - The company acquired a portion of Depot Connect International for $130 million, which includes five locations providing various waste handling and treatment services [1] - Clean Harbors plans to continue pursuing acquisition opportunities despite challenges in 2025 [1] Strategic Initiatives - A three-year, $110 million contract with Joint Base Pearl-Harbor Hickam is expected to add $15 to $30 million in additional earnings annually [1] - The company anticipates a 20% increase in PFAS work this year due to new federal regulations [1] Future Guidance - For 2026, Clean Harbors expects growth driven by reshoring, PFAS opportunities, and a growing pipeline of remediation work [2] - Projected adjusted EBITDA for 2026 is between $1.20 billion and $1.26 billion, with adjusted net income expected between $410 million and $461 million [2] - The company forecasts a decline in base oil prices in 2026, which may pose challenges [2]