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Press release from Business Wire

Clean Harbors Reports Fourth-Quarter and Year-End 2011 Financial Results

<ul> <li class='bwlistitemmargb'> <i>Double-Digit Organic Growth and Contributions from Acquisitions Drive Strong Results</i> </li> <li class='bwlistitemmargb'> <i>Q4 Revenue Increases 31% to $546 Million</i> </li> <li class='bwlistitemmargb'> <i>Q4 Net Income Up 64%; EBITDA Climbs 38% to $97.4 Million</i> </li> <li class='bwlistitemmargb'> <i>Company Increases 2012 Guidance</i> </li> </ul>

Wednesday, February 22, 2012

Clean Harbors Reports Fourth-Quarter and Year-End 2011 Financial Results07:30 EST Wednesday, February 22, 2012 NORWELL, Mass. (Business Wire) -- Clean Harbors, Inc. (“Clean Harbors”) (NYSE: CLH), the leading provider of environmental, energy and industrial services throughout North America,today announced financial results for the fourth quarter and year ended December 31, 2011. Revenues for the fourth quarter grew 31% to $545.9 million from $417.1 million in the same period in 2010, reflecting a combination of acquisitions and organic growth. Income from operations in the fourth quarter of 2011 increased 38% to $59.2 million from $43.0 million in the same period of 2010. All share and per share amounts included in this earnings release reflect the two-for-one stock split completed in July 2011 and have been adjusted retroactively for all periods presented. Fourth quarter 2011 net income rose 64% to $38.2 million, or $0.72 per diluted share, compared with $23.3 million, or $0.44 per diluted share, in the fourth quarter of 2010. The effective tax rate in the fourth quarter of 2011 was 21 percent compared to 37 percent in the same period of last year. The provision for income taxes in the fourth quarter of 2011 includes a $6.5 million benefit, or approximately $0.12 per diluted share, due to a favorable release of unrecognized tax benefits. EBITDA (see description below) increased 38% to $97.4 million in the fourth quarter of 2011 compared with $70.3 million in the same period of 2010. Comments on the Fourth Quarter “We concluded an outstanding 2011 with a strong fourth-quarter performance where we again saw the leverage inherent in our business model as we generated a 38% increase in EBITDA on a 31% increase in revenue,” said Alan S. McKim, Chairman and Chief Executive Officer. “Our growth was driven by a combination of our 2011 acquisitions and double-digit organic growth in the quarter. We also delivered a 64% increase in net income reflecting our margin improvement initiatives, as well as the favorable tax benefit.” “All four of our operating segments contributed to our profitable growth in the quarter,” McKim said. “Within Technical Services, volumes at our facilities were steady with the utilization rate at our incinerators of 91%, while our landfill business generated its strongest quarter of the year. Within Field Services, a consistent flow of large-scale projects and ongoing maintenance work resulted in 17% year-over-year organic growth, exclusive of emergency response work. Our Industrial Services segment, which grew more than 50%, benefitted from our recent acquisitions, increased activity in the Oil Sands region and another solid quarter of turnaround work at our refinery customers. Our Oil & Gas Field Services segment exceeded our expectations in the quarter, growing more than 140% as we experienced increased demand in Western Canada, a stable stream of shale play-related work in both the U.S. and Canada, and strong cross-selling opportunities through our recent acquisitions. In particular, our Peak Energy Services acquisition has proven to be an early winner for us, providing us with a broader portfolio of highly sought after well-site services.” Full-Year 2011 Results Revenues for 2011 increased 15% to $1.98 billion from $1.73 billion in 2010. 2011 revenues included $43.6 million related to the Company's participation in the Yellowstone River oil spill response effort. Revenues for 2010 included approximately $253 million related to the Company's participation in the oil spill response efforts in the Gulf of Mexico and Michigan. Income from operations increased slightly in 2011 to $217.7 million from $211.9 million in 2010. 2011 net income was $127.3 million, or $2.39 per diluted share, compared with $130.5 million, or $2.47 per diluted share on a split-adjusted basis, in 2010. EBITDA (see description below) increased 11% in 2011 to $350.0 million from $314.7 million for 2010. “2011 was another year of significant financial achievement for Clean Harbors,” McKim said. “We grew our revenue to nearly $2 billion and generated an EBITDA margin of 17.6% for the year through a combination of selective acquisitions and robust organic growth. We also advanced our organizational infrastructure and internal systems to prepare the Company for its next stage of growth. We began the year with approximately 6,800 employees and concluded with more than 8,300. We continue to build a team that we believe is unmatched in our industry. Our commitment to service excellence and safety remains a key element in our success. For 2011, we exceeded our key safety metrics, which reflects the continuing impact of the company-wide SafetyFirst! program that is providing us with another competitive advantage.” Non-GAAP Fourth-Quarter Results Clean Harbors reports EBITDA results, which are non-GAAP financial measures, as a complement to results provided in accordance with accounting principles generally accepted in the United States (GAAP) and believes that such information provides additional useful information to investors since the Company's loan covenants are based upon levels of EBITDA achieved. The Company defines EBITDA in accordance with its existing credit agreement, as described in the following reconciliation showing the differences between reported net income and EBITDA for the fourth quarter and year-end 2011 and 2010 (in thousands):     For the three months ended: For the year ended: December 31,2011   December 31,2010   December 31,2011   December 31,2010     Net income $38,233 $23,329 $127,252 $130,515 Accretion of environmental liabilities 2,449 2,508 9,680 10,307 Depreciation and amortization 35,663 24,802 122,663 92,473 Other income (471) (310) (6,402) (2,795) Loss on early extinguishment of debt — — — 2,294 Interest expense, net 11,342 6,164 39,389 27,936 Provision for income taxes 10,143 13,815 57,426 56,756 Income from discontinued operations, net of tax —   —   —   (2,794) EBITDA $97,359   $70,308   $350,008   $314,692   Business Outlook and Financial Guidance “We enter 2012 with significant operational and business momentum across nearly all lines of our business. Underlying industry trends, particularly in the Energy and Industrial areas of our business, continue to support our long-term outlook for growth. Looking ahead, we are continuing to see indications that the general economic recovery has taken hold in North America. As a result, we intend to continue to aggressively execute our two-pronged growth strategy of internal investments and select acquisitions. We have substantial financial flexibility as we exited the year with more than $260 million in cash. We will remain active on the acquisition front in 2012 as we have a variety of attractive candidates in our pipeline. We are currently evaluating potential acquisitions within all four of our operating segments, which affords us the opportunity to continue to be selective. We also will continue to make growth-oriented internal investments with a target of $175 million to $180 million in capital expenditures for 2012,” McKim concluded. Based on its fourth-quarter performance and current market conditions, Clean Harbors is increasing its 2012 annual revenue and EBITDA guidance. The Company currently expects 2012 revenues in the range of $2.20 billion to $2.25 billion, up from its previous revenue guidance of $2.15 billion to $2.20 billion. For 2012, the Company expects EBITDA in the range of $400 million to $410 million, an increase from its previous guidance of $390 million to $400 million. The Company's 2012 guidance implies an EBITDA margin of greater than 18% for the full year. This guidance is exclusive of any potential future acquisitions. 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. On the call, management will discuss Clean Harbors' financial results, business outlook and growth strategy. Investors who wish to listen to the webcast 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 of the call. If you are unable to listen to the live call, the webcast will be archived on the Company's website. About Clean Harbors Clean Harbors is the leading provider of environmental, energy and industrial services throughout North America. The Company serves more than 60,000 customers, including a majority of the Fortune 500 companies, thousands of smaller private entities and numerous federal, state, provincial and local governmental agencies. Headquartered in Norwell, Massachusetts, Clean Harbors has more than 200 locations, including over 50 waste management facilities, throughout North America in 37 U.S. states, seven Canadian provinces, Mexico and Puerto Rico. For more information, visit 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,” “estimates,” “projects,” or similar expressions. Such statements may include, but are not limited to, statements about the Company's business outlook and financial guidance 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 the Company's most recently filed Form 10-K and Form 10-Q. Therefore, readers are cautioned not to place undue reliance on these forward-looking statements. The Company undertakes no obligation to revise or publicly release the results of any revision to these forward-looking statements other than through its various filings with the Securities and Exchange Commission, which may be viewed at in the “Investors” section of the Company's website at www.cleanharbors.com.   CLEAN HARBORS, INC. AND SUBSIDIARIESUNAUDITED CONSOLIDATED STATEMENTS OF INCOME(in thousands except per share amounts)         For the three months ended:For the year ended:December 31,December 31,December 31,December 31,2011201020112010   Revenues $545,886 $417,058 $1,984,136 $1,731,244 Cost of revenues (exclusive of items shown separately below) 373,142 290,770 1,379,991 1,210,740 Selling, general and administrative expenses 75,385 55,980 254,137 205,812 Accretion of environmental liabilities 2,449 2,508 9,680 10,307 Depreciation and amortization 35,663 24,802 122,663 92,473 Income from operations 59,247 42,998 217,665 211,912 Other income 471 310 6,402 2,795 Loss on early extinguishment of debt — — — (2,294) Interest (expense), net (11,342) (6,164) (39,389) (27,936) Income from continuing operations before provision for income taxes 48,376 37,144 184,678 184,477 Provision for income taxes 10,143 13,815 57,426 56,756 Income from continuing operations 38,233 23,329 127,252 127,721 Income from discontinued operations, net of tax — — — 2,794 Net income $38,233 $23,329 $127,252 $130,515 Earnings per share: Basic $0.72 $0.44 $2.40 $2.48 Diluted $0.72 $0.44 $2.39 $2.47   Weighted average common shares outstanding 53,081 52,742 52,961 52,622 Weighted average common shares outstanding plus potentially dilutive common shares 53,401 53,165 53,324 52,932     CLEAN HARBORS, INC. AND SUBSIDIARIESUNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETSASSETS(in thousands)     December 31,December 31,20112010 Current assets: Cash and cash equivalents $ 260,723 $ 302,210 Marketable securities 111 3,174 Accounts receivable, net 449,553 332,678 Unbilled accounts receivable 29,385 19,117 Deferred costs 5,903 6,891 Prepaid expenses and other current assets 73,349 28,939 Supplies inventories 56,242 44,546 Deferred tax assets   16,602   14,982 Total current assets   891,868   752,537   Property, plant and equipment, net   903,947   655,394   Other assets: Long-term investments 4,245 5,437 Deferred financing costs 13,607 7,768 Goodwill 122,392 60,252 Permits and other intangibles, net 139,644 114,400 Other   10,100   6,687 Total other assets   289,988   194,544 Total assets $ 2,085,803 $ 1,602,475     CLEAN HARBORS, INC. AND SUBSIDIARIESUNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETSLIABILITIES AND STOCKHOLDERS' EQUITY(in thousands)     December 31,December 31,20112010 Current liabilities: Current portion of capital lease obligations $ 8,310 $ 7,954 Accounts payable 178,084 136,978 Deferred revenue 32,297 30,745 Accrued expenses 147,992 116,089 Current portion of closure, post-closure and remedial liabilities   15,059   14,518 Total current liabilities   381,742   306,284 Other liabilities: Closure and post-closure liabilities, less current portion 30,996 32,830 Remedial liabilities, less current portion 124,146 128,944 Long-term obligations 524,203 264,007 Capital lease obligations, less current portion 6,375 6,839 Unrecognized tax benefits and other long-term liabilities   117,354   82,744 Total other liabilities   803,074   515,364 Total stockholders' equity, net   900,987   780,827 Total liabilities and stockholders' equity $ 2,085,803 $ 1,602,475 Clean Harbors, Inc.James M. Rutledge, 781-792-5100Vice Chairman and Chief Financial OfficerInvestorRelations@cleanharbors.comorSharon Merrill AssociatesJim Buckley, 617-542-5300Executive Vice Presidentclh@investorrelations.com