UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) April 28, 2005
CLEAN HARBORS, INC.
(Exact name of registrant as specified in its charter)
Massachusetts |
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0-16379 |
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04-2997780 |
(State or other jurisdiction of incorporation) |
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(Commission File Number) |
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(IRS Employer Identification No.) |
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1501 Washington Street, Braintree, Massachusetts |
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02184-7535 |
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(Address of principal executive offices) |
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(Zip Code) |
Registrants telephone number, including area code (781) 849-1800 ext. 4454
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition.
On April 28, 2005, Clean Harbors, Inc. (the Company) issued a press release announcing the Companys results of operations for the first quarter and ended March 31, 2005. A copy of that press release is furnished with this report as Exhibit 99.1.
Item 9.01 Financial Statements and Exhibits
(c) Exhibits
99.1 Press Release date April 28, 2005
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Clean Harbors, Inc. |
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(Registrant) |
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April 28, 2005 |
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/s/ Mark S. Burgess |
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Executive Vice President and |
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Chief Financial Officer |
1
Exhibit 99.1
Press Release
Clean Harbors Announces First-Quarter 2005 Financial Results
Company Exceeds
Financial Guidance; Delivers 16 Percent Revenue Growth
and 149 Percent Growth in Income from Operations
Braintree, MA April 28, 2005 Clean Harbors, Inc. (Clean Harbors) (NASDAQ: CLHB), the leading provider of environmental and hazardous waste management services throughout North America, today announced financial results for the first quarter ended March 31, 2005.
Clean Harbors increased first-quarter 2005 revenues to $165.0 million from $142.8 million in the first quarter of 2004. Income from operations for the first quarter of 2005 totaled $10.2 million, a 149 percent increase from $4.1 million for the first quarter of 2004. The Company generated net income of $4.8 million, or $0.27 per diluted share, for the first quarter of 2005. In the first quarter of 2004, the Company generated net income of $2.8 million, or $0.14 per basic share, which included a non-cash gain of $5.3 million associated with the embedded derivative on the Companys preferred stock. Diluted loss for the first quarter of 2004 was $(0.08) per share after adjusting for the non-cash gain. Clean Harbors Series C Preferred Stock was redeemed in June 2004, eliminating its bottom-line effect for future quarters.
EBITDA (see description below) increased by 69 percent to $20.1 million in the first quarter of 2005 from $11.9 million (as restated) in the same period a year earlier. EBITDA for the first quarter of 2005 benefited from the elimination of $1.9 million in legal reserves associated with an environmental matter that the Company determined is no longer probable.
Comments on the First Quarter
The demand environment remained strong and Clean Harbors executed on plan once again as we exceeded our financial guidance for the first quarter of 2005, stated Alan S. McKim, Chairman and Chief Executive Officer. While inclement weather conditions affected our utilization rates, Clean Harbors still generated 16 percent revenue growth year-over-year. Our Site Services business was particularly robust due to emergency response projects that we undertook in the first quarter and base business wins. Our Transportation & Disposal business also showed continued improvement in the quarter. In addition, our vertical market approach drove steady volumes to our landfills and incinerators throughout the quarter, which more than offset our limited number of large facilities projects.
We also continued to make significant headway with our expense management initiatives, which contributed to our achievement of improved operating income and a substantial increase in EDITDA for the quarter, McKim said. In particular, we are beginning to benefit from the investments we have been making in internalizing transportation. Our spending on outsourced transportation costs declined by more than $2 million in the quarter, despite higher business volumes, as we continue to hire additional drivers, purchase more tractors and better utilize our rail assets.
1501 Washington Street PO Box 859048 Braintree, Massachusetts 02185-9048 800.282.0058 www.cleanharbors.com
Non-GAAP First-Quarter Results
Clean Harbors reports EBITDA results, which are non-GAAP, as a complement to results provided in accordance with accounting principles generally accepted in the United States (GAAP) and believes that such information provides an additional measurement of the Companys performance. The Company defines EBITDA in accordance with its outstanding credit agreement, as described in the following reconciliation showing the differences between reported income and EBITDA for 2005 and 2004 (in thousands):
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For the three months ended: |
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March 31, |
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March 31, |
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(Restated) |
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Net income |
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4,841 |
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2,817 |
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Accretion of environmental liabilities |
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2,634 |
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2,588 |
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Depreciation and amortization |
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7,209 |
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5,405 |
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Interest expense, net |
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5,961 |
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5,358 |
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Provision for income taxes |
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32 |
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1,212 |
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Other income |
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(588 |
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Gain on sale of fixed assets |
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(31 |
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(244 |
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Non-recurring severance charges |
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16 |
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Change in value of embedded derivative |
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(5,287 |
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EBITDA |
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20,058 |
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11,865 |
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Business Outlook & Financial Guidance
We have built a solid foundation for profitable growth at Clean Harbors, said McKim. As North Americas leader in hazardous waste management, our offerings are increasingly in demand and we have developed a healthy pipeline of potential business. Going forward, we will focus on securing more large facilities projects, which deliver considerable volumes to our network of disposal facilities. In addition, we will seek to extend our momentum in Site Services, including pursuing selective acquisitions.
On the expense side, we remain committed to our goal of significant cost reduction. We also will continue to invest in systems and technology that will increase our operational efficiency, such as the WIN software platform we are installing throughout our Canadian locations over the next six months, concluded McKim.
For the second quarter of 2005, the Company expects to grow revenue by 5 to 6 percent year over year and generate EBITDA in the range of $21.5 million to $23.5 million.
Conference Call Information
Clean Harbors will conduct a conference call for investors to discuss the information contained in this news release today, April 28 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. In addition, if you are unable to listen to the live webcast, the call will be archived on the investor section of the website.
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, 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 managements opinions only as of the date hereof. The Company undertakes no obligation to revise or publicly release the results of any revision to these forward-looking statements. Furthermore, all financial information in this press release is unaudited, and may change materially upon completion of the audit of the Companys financial statements. A variety of factors beyond the control of the Company affect the Companys 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 to all activities of the Companys operations;
The outcome of litigation or threatened litigation or regulatory actions;
The effect of commodity pricing on overall revenues and profitability;
The possibility that the Sarbanes-Oxley 404 review process will reveal material weaknesses in the
Companys financial controls.
Possible fluctuations in quarterly or annual results or adverse impacts on the Companys 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 industry on the availability of capital and financing;
The Companys ability to manage the significant environmental liabilities which it assumed in connection with the CSD acquisition; and
The availability and costs of liability insurance and financial assurance required by governmental entities relating to our facilities.
Any of the above factors and numerous others not listed nor foreseen may adversely impact the Companys financial performance. Additional information on the potential factors that could affect the Companys 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, in its entirety and specifically Factors That May Affect Future Results under Item 7, for the fiscal year ended December 31, 2004, which was filed with the SEC on March 31, 2005 and Form 10-Q for the quarter ended March 31, 2005, which the Company plans to file on May 10, 2005.
Contact:
Jason Fredette
Associate Vice President
Sharon Merrill Associates
(617) 542-5300
jfredette@investorrelations.com
CLEAN HARBORS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited
(in thousands except per share amounts)
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Three Months Ended |
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2005 |
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2004 |
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Revenues |
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$ |
164,966 |
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$ |
142,757 |
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Cost of revenues |
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120,547 |
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107,460 |
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Selling, general and administrative expenses |
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24,361 |
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23,204 |
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Accretion of environmental liabilities |
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2,634 |
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2,588 |
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Depreciation and amortization |
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7,209 |
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5,405 |
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Income from operations |
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10,215 |
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4,100 |
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Other income |
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619 |
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5,287 |
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Interest (expense), net |
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(5,961 |
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(5,358 |
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Income before provision for income taxes |
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4,873 |
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4,029 |
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Provision for income taxes |
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32 |
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1,212 |
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Net income |
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4,841 |
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2,817 |
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Dividends and accretion on Series B and C Preferred Stocks and accretion on Series C Preferred Stock |
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70 |
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855 |
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Net income attributable to common shareholders |
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$ |
4,771 |
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$ |
1,962 |
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Earnings (loss) per share: |
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Basic earnings attributable to common shareholders |
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$ |
0.33 |
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$ |
0.14 |
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Diluted earnings (loss) attributable to common shareholders |
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$ |
0.27 |
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(0.08 |
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Weighted average common shares outstanding |
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14,602 |
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13,960 |
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Weighted average common shares outstanding plus potentially dilutive common shares |
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18,072 |
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16,392 |
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CLEAN HARBORS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
(in thousands)
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(Unaudited) |
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December 31, |
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Current assets: |
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Cash and cash equivalents |
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$ |
46,034 |
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$ |
31,081 |
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Marketable securities |
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16,800 |
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Accounts receivable, net |
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119,574 |
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120,886 |
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Unbilled accounts receivable |
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7,824 |
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5,377 |
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Deferred costs |
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4,361 |
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4,923 |
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Prepaid expenses |
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14,126 |
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13,407 |
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Supplies inventories |
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10,752 |
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10,318 |
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Deferred tax asset |
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187 |
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188 |
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Properties held for sale |
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8,554 |
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8,849 |
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Total current assets |
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211,412 |
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211,829 |
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Property, plant and equipment, net |
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179,291 |
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180,526 |
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Other assets: |
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Deferred financing costs |
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8,668 |
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8,950 |
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Goodwill |
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19,032 |
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19,032 |
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Permits and other intangibles, net |
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79,678 |
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80,463 |
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Deferred tax asset |
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486 |
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488 |
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Other |
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3,629 |
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3,414 |
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111,493 |
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112,347 |
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Total assets |
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$ |
502,196 |
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$ |
504,702 |
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CLEAN HARBORS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS EQUITY
(dollars in thousands)
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(Unaudited) |
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December 31, |
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Current liabilities: |
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Uncashed checks |
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$ |
5,592 |
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$ |
6,542 |
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Current portion of capital lease obligations |
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1,622 |
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1,522 |
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Accounts payable |
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70,714 |
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70,363 |
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Accrued disposal costs |
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3,091 |
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3,032 |
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Deferred revenue |
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19,535 |
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22,060 |
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Other accrued expenses |
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39,987 |
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41,054 |
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Current portion of closure, post-closure and remedial liabilities |
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15,340 |
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14,258 |
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Income taxes payable |
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511 |
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2,302 |
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Total current liabilities |
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156,392 |
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161,133 |
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Other liabilities: |
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Closure and post-closure liabilities, less current portion |
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23,275 |
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22,721 |
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Remedial liabilities, less current portion |
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139,654 |
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144,289 |
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Long-term obligations, less current maturities |
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148,163 |
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148,122 |
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Capital lease obligations, less current portion |
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3,973 |
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3,485 |
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Other long-term liabilities |
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13,232 |
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13,298 |
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Accrued pension cost |
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597 |
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616 |
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Total other liabilities |
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328,894 |
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332,531 |
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Total stockholders equity, net |
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16,910 |
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11,038 |
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Total liabilities and stockholders equity |
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$ |
502,196 |
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$ |
504,702 |
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