Posts 12% Q3 Revenue Increase to $1.53 Billion, Led by Strength in Field Services
Generates 26% Q3 Net Income Growth to $115.2 Million, or EPS of $2.12
Achieves 18% Growth in Q3 Adjusted EBITDA to $301.8 Million with Margin of 19.7%
Revises Full-Year 2024 Adjusted EBITDA and Adjusted Free Cash Flow Guidance
Commercial Launch of Kimball, Nebraska Incinerator Planned for November

Clean Harbors, Inc. ("Clean Harbors" or the "Company") (NYSE:CLH), the leading provider of environmental and industrial services throughout North America, today announced financial results for the third quarter ended September 30, 2024.

"We delivered profitable growth in both our operating segments while improving our consolidated Adjusted EBITDA margin by 100 basis points from the same period a year ago," said Mike Battles, Co-Chief Executive Officer. "Underlying demand remained healthy across our Environmental Services (ES) segment. Despite higher Adjusted EBITDA, our Safety-Kleen Sustainability Solutions (SKSS) segment results reflected softer-than-expected demand and pricing of base oil and lubricants throughout the quarter with a more meaningful decline in September. We continue to prioritize safety with industry-leading results, achieving a Total Recordable Incident Rate (TRIR) of 0.69 year-to-date through September."

Third-Quarter 2024 Results

Revenues grew 12% to $1.53 billion, compared with $1.37 billion in the same period of 2023. Income from operations increased 25% to $192.3 million, compared with $154.4 million in the third quarter of 2023.

Net income was up 26% to $115.2 million, or $2.12 per diluted share, compared with $91.3 million, or $1.68 per diluted share, for the same period in 2023.

Adjusted EBITDA (see description and reconciliation below) grew 18% to $301.8 million, compared with $255.0 million in the same period of 2023.

Third-Quarter 2024 Segment Review

"Our ES segment achieved a 13% increase in revenue and 15% growth in Adjusted EBITDA, which generated a 40-basis point improvement in segment margin. The third quarter marks our tenth consecutive quarter of year-over-year margin improvement in the ES segment," said Eric Gerstenberg, Co-Chief Executive Officer. "ES growth was led by Field Services, which grew 68%, reflecting the HEPACO acquisition earlier this year and healthy organic growth in our legacy business. Technical Services revenue grew 8% on higher network volumes and pricing. Incineration utilization was 89% for the quarter, up from 86% in the same period a year ago. Average incineration pricing increased 6%. Safety-Kleen Environmental Services posted another consistent performance with 8% revenue growth in the ES segment. Our Industrial Services business experienced a difficult environment in Q3 resulting from weakness in the U.S. refinery space, where we saw work deferred and fall turnarounds scaled back given industry challenges in that vertical."

"SKSS results improved from the third quarter a year ago. Revenues grew 6%, reflecting the contribution of our Noble Oil acquisition in March, while Adjusted EBITDA increased 32%," said Battles. "However, current supply overhangs in the base oil market resulted in lower demand and pricing pressure, which caused a weaker-than-anticipated EBITDA performance this quarter."

Business Outlook and Financial Guidance

"As we enter the final quarter of 2024, the overall demand environment in North America is healthy, and the outlook for our ES segment is positive," Gerstenberg said. "Favorable market dynamics, including reshoring, infrastructure spending, PFAS, and other regulatory changes should continue to fuel growth opportunities for Clean Harbors. We are meeting these opportunities with new capacity and capabilities. The commercial launch of our new incinerator in Kimball, Nebraska is scheduled for November, providing an essential outlet for additional hazardous waste volumes as it ramps up over the next 12-18 months. On the services side, the addition of HEPACO's emergency response capabilities creates a foundation for continued growth in Field Services. We also expect our Technical Services and SK Environmental businesses to grow steadily, feeding volumes into Kimball and the other facilities in our network. In Industrial Services, we are taking actions to counter the weakness in fall turnarounds and look to return that business to revenue growth in 2025."

"Within SKSS, we remain committed to stabilizing our business amidst the current pricing challenges and weak demand for base oil. We are taking decisive actions to reduce production and collection costs while also pursuing growth initiatives in Group III, blended sales, and our partnership with Castrol. These programs have the potential to reduce the carbon footprints of businesses significantly, and we believe they will gain traction as more customers look to Safety-Kleen as their sustainability partner in the coming years," Battles concluded. "Overall, despite some market obstacles related to base oil and refining customers, we expect to end 2024 with strong momentum across our network of disposal facilities and service offerings giving us a positive trajectory into 2025."

Based on its third-quarter performance and current forecast, Clean Harbors revised its full-year 2024 guidance and now expects:

Adjusted EBITDA in the range of $1.10 billion to $1.12 billion, or a midpoint of $1.11 billion, which represents 10% growth year-over-year. This Adjusted EBITDA range is based on anticipated GAAP net income in the range of $375 million to $395 million.
Adjusted free cash flow in the range of $280 million to $320 million, or a midpoint of $300 million, which includes spending related to the Kimball incinerator and the Company's Baltimore expansion. The Company is revising this range due to its new Adjusted EBITDA guidance and increased short-term working capital levels. This new range is based on anticipated net cash from operating activities in the range of $680 million to $750 million.

Non-GAAP Results

Clean Harbors reports Adjusted EBITDA, which is a non-GAAP financial measure and should not be considered an alternative to net income or other measurements under generally accepted accounting principles (GAAP) but viewed only as a supplement to those measurements. Adjusted EBITDA is not calculated identically by all companies, and therefore the Company's measurement of Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies. Clean Harbors believes that Adjusted EBITDA provides additional useful information to investors because the Company's management routinely evaluates the performance of its businesses based upon levels of Adjusted EBITDA, which excludes certain expenses relating to transactions not reflective of our core operations, and because the Company's loan covenants are based upon levels of Adjusted EBITDA achieved. The Company defines Adjusted EBITDA consistent with its existing revolving credit agreement, as described in the following reconciliation showing the differences between reported GAAP net income and Adjusted EBITDA for the three and nine months ended September 30, 2024 and 2023 (in thousands, except percentages):

	Three Months Ended						Nine Months Ended
	September 30, 2024			September 30, 2023			September 30, 2024			September 30, 2023
Net income	$	115,213		$	91,340		$	318,325		$	279,507
Accretion of environmental liabilities		3,618			3,388			10,139			10,281
Stock-based compensation		5,837			4,291			20,690			14,809
Depreciation and amortization		100,063			92,970			295,632			267,425
Other expense (income), net		1,123			(334	)		2,431			833
Loss on early extinguishment of debt		—			—			—			2,362
Interest expense, net of interest income		35,779			29,696			100,767			80,400
Provision for income taxes		40,181			33,666			111,741			102,044
Adjusted EBITDA	$	301,814		$	255,017		$	859,725		$	757,661
Adjusted EBITDA Margin		19.7	%		18.7	%		19.3	%		18.6	%

Adjusted Free Cash Flow Reconciliation

Clean Harbors reports adjusted free cash flow, which is a non-GAAP financial measure that should not be considered an alternative to net cash from operating activities or other measurements under GAAP. The Company considers adjusted free cash flow to be a measurement of liquidity that provides useful information to investors about its ability to generate cash. The Company defines adjusted free cash flow as net cash from operating activities excluding cash impacts of items derived from non-operating activities, less additions to property, plant and equipment plus proceeds from sale and disposal of fixed assets. Adjusted free cash flow is not calculated identically by all companies, and therefore the Company's measurement of adjusted free cash flow may not be comparable to similarly titled measures reported by other companies.

An itemized reconciliation between reported GAAP net cash from operating activities and adjusted free cash flow is as follows for the three and nine months ended September 30, 2024 and 2023 (in thousands):

	Three Months Ended						Nine Months Ended
	September 30, 2024			September 30, 2023			September 30, 2024			September 30, 2023
Adjusted free cash flow
Net cash from operating activities	$	239,239		$	220,119		$	473,833		$	455,692
Additions to property, plant and equipment		(96,803	)		(107,608	)		(369,826	)		(311,906	)
Proceeds from sale and disposal of fixed assets		2,058			2,185			6,353			5,129
Adjusted free cash flow	$	144,494		$	114,696		$	110,360		$	148,915

Adjusted EBITDA Guidance Reconciliation

An itemized reconciliation between projected GAAP net income and projected Adjusted EBITDA is as follows (in millions):

	For the Year Ending December 31, 2024
Projected net income	$375	to	$395
Adjustments:
Accretion of environmental liabilities	15	to	14
Stock-based compensation	27	to	30
Depreciation and amortization	405	to	395
Interest expense, net	145	to	140
Provision for income taxes	133	to	146
Projected Adjusted EBITDA	$1,100	to	$1,120

Adjusted Free Cash Flow Guidance Reconciliation

An itemized reconciliation between projected GAAP net cash from operating activities and projected adjusted free cash flow is as follows (in millions):

	For the Year Ending December 31, 2024
Projected net cash from operating activities	$680	to	$750
Additions to property, plant and equipment	(410)	to	(440)
Proceeds from sale and disposal of fixed assets	10	to	10
Projected adjusted free cash flow	$280	to	$320

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. During the call, management will discuss Clean Harbors' financial results, business outlook and growth strategy. Investors who wish to listen to the webcast and view the accompanying slides should visit the Investor Relations section of the Company's website at www.cleanharbors.com. The live call also can be accessed by dialing 877.709.8155 or 201.689.8881 prior to the start time. If you are unable to listen to the live conference call, the webcast will be archived on the Company's website.

About Clean Harbors

Clean Harbors (NYSE:CLH) is North America's leading provider of environmental and industrial services. The Company serves a diverse customer base, including a majority of Fortune 500 companies. Its customer base spans a number of industries, including chemical, manufacturing and refining, as well as numerous government agencies. These customers rely on Clean Harbors to deliver a broad range of services such as end-to-end hazardous waste management, emergency spill response, industrial cleaning and maintenance, and recycling services. Through its Safety-Kleen subsidiary, Clean Harbors also is a leading provider of parts washers and environmental services to commercial, industrial and automotive customers, as well as North America's largest re-refiner and recycler of used oil. Founded in 1980 and based in Massachusetts, Clean Harbors operates in the United States, Canada, Mexico, Puerto Rico and India. 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," "seeks," "should," "estimates," "projects," "may," "likely," "potential" or similar expressions. Such statements may include, but are not limited to, statements about the Company's future financial and operating results, plans, strategy, objectives and goals, cost management initiatives, contingent liabilities, liquidity, business and market conditions, customer demand, acquisitions, growth opportunities, expectations, and other statements that are not historical facts. Such statements are based upon the beliefs and expectations of Clean Harbors' management as of the date of this press release 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 Clean Harbors' most recently filed reports on Form 10-K and Form 10-Q. Forward-looking statements are neither historical facts nor assurances of future performance. Therefore, readers are cautioned not to place undue reliance on these forward-looking statements. Clean Harbors undertakes no obligation to revise or publicly release the results of any revision to these forward-looking statements other than through its filings with the Securities and Exchange Commission, which may be viewed in the "Investors" section of Clean Harbors' website at www.cleanharbors.com.

CLEAN HARBORS, INC. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
		2024			2023			2024			2023
Revenues	$	1,529,422		$	1,365,696		$	4,458,836		$	4,070,983
Cost of revenues (exclusive of items shown separately below)		1,055,599			943,951			3,062,211			2,822,977
Selling, general and administrative expenses		177,846			171,019			557,590			505,154
Accretion of environmental liabilities		3,618			3,388			10,139			10,281
Depreciation and amortization		100,063			92,970			295,632			267,425
Income from operations		192,296			154,368			533,264			465,146
Other (expense) income, net		(1,123	)		334			(2,431	)		(833	)
Loss on early extinguishment of debt		—			—			—			(2,362	)
Interest expense, net		(35,779	)		(29,696	)		(100,767	)		(80,400	)
Income before provision for income taxes		155,394			125,006			430,066			381,551
Provision for income taxes		40,181			33,666			111,741			102,044
Net income	$	115,213		$	91,340		$	318,325		$	279,507
Earnings per share:
Basic	$	2.14		$	1.69		$	5.90		$	5.17
Diluted	$	2.12		$	1.68		$	5.87		$	5.14
Shares used to compute earnings per share - Basic		53,951			54,122			53,936			54,097
Shares used to compute earnings per share - Diluted		54,229			54,419			54,229			54,411

CLEAN HARBORS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands)

	September 30, 2024		December 31, 2023
Current assets:	(unaudited)
Cash and cash equivalents	$	512,371	$	444,698
Short-term marketable securities		82,371		106,101
Accounts receivable, net		1,100,660		983,111
Unbilled accounts receivable		204,308		107,859
Inventories and supplies		376,564		327,511
Prepaid expenses and other current assets		78,204		82,939
Total current assets		2,354,478		2,052,219
Property, plant and equipment, net		2,452,312		2,193,318
Other assets:
Operating lease right-of-use assets		246,061		187,060
Goodwill		1,485,065		1,287,736
Permits and other intangibles, net		708,935		602,797
Other long-term assets		59,159		59,739
Total other assets		2,499,220		2,137,332
Total assets	$	7,306,010	$	6,382,869

Current liabilities:
Current portion of long-term debt	$	15,102	$	10,000
Accounts payable		504,206		451,806
Deferred revenue		103,291		95,230
Accrued expenses and other current liabilities		398,236		397,157
Current portion of closure, post-closure and remedial liabilities		30,477		26,914
Current portion of operating lease liabilities		70,539		56,430
Total current liabilities		1,121,851		1,037,537
Other liabilities:
Closure and post-closure liabilities, less current portion		105,375		105,044
Remedial liabilities, less current portion		94,384		97,885
Long-term debt, less current portion		2,773,659		2,291,717
Operating lease liabilities, less current portion		179,040		131,743
Deferred tax liabilities		356,150		353,107
Other long-term liabilities		147,241		118,330
Total other liabilities		3,655,849		3,097,826
Total stockholders' equity, net		2,528,310		2,247,506
Total liabilities and stockholders' equity	$	7,306,010	$	6,382,869

CLEAN HARBORS, INC. AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)

	Nine Months Ended
	September 30, 2024			September 30, 2023
Cash flows from operating activities:
Net income	$	318,325		$	279,507
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization		295,632			267,425
Allowance for doubtful accounts		5,674			2,620
Amortization of deferred financing costs and debt discount		4,623			4,036
Accretion of environmental liabilities		10,139			10,281
Changes in environmental liability estimates		4,347			3,258
Deferred income taxes		(418	)		(356	)
Other expense, net		2,431			833
Stock-based compensation		20,690			14,809
Loss on early extinguishment of debt		—			2,362
Environmental expenditures		(19,679	)		(24,064	)
Changes in assets and liabilities, net of acquisitions:
Accounts receivable and unbilled accounts receivable		(145,647	)		(46,445	)
Inventories and supplies		(39,673	)		12,691
Other current and long-term assets		(47,826	)		(18,190	)
Accounts payable		30,004			(40,013	)
Other current and long-term liabilities		35,211			(13,062	)
Net cash from operating activities		473,833			455,692
Cash flows used in investing activities:
Additions to property, plant and equipment		(369,826	)		(311,906	)
Proceeds from sale and disposal of fixed assets		6,353			5,129
Acquisitions, net of cash acquired		(474,011	)		(119,596	)
Proceeds from sale of business		750			750
Additions to intangible assets including costs to obtain or renew permits		(2,545	)		(1,507	)
Purchases of available-for-sale securities		(73,682	)		(104,329	)
Proceeds from sale of available-for-sale securities		100,021			84,390
Net cash used in investing activities		(812,940	)		(447,069	)
Cash flows from (used in) financing activities:
Change in uncashed checks		(5,852	)		3,004
Tax payments related to withholdings on vested restricted stock		(11,514	)		(10,886	)
Repurchases of common stock		(30,215	)		(18,000	)
Deferred financing costs paid		(8,316	)		(6,371	)
Payments on finance leases		(23,596	)		(11,594	)
Principal payments on debt		(11,327	)		(621,475	)
Proceeds from issuance of debt, net of discount		499,375			500,000
Borrowing from revolving credit facility		—			114,000
Payment on revolving credit facility		—			(114,000	)
Net cash from (used in) financing activities		408,555			(165,322	)
Effect of exchange rate change on cash		(1,775	)		61
Increase (decrease) in cash and cash equivalents		67,673			(156,638	)
Cash and cash equivalents, beginning of period		444,698			492,603
Cash and cash equivalents, end of period	$	512,371		$	335,965

Supplemental information:
Cash payments for interest and income taxes:
Interest paid	$	134,177	$	100,813
Income taxes paid, net of refunds		100,752		107,328
Non-cash investing activities:
Property, plant and equipment accrued		43,604		29,127
ROU assets obtained in exchange for operating lease liabilities		98,927		61,741
ROU assets obtained in exchange for finance lease liabilities		53,391		26,317

Supplemental Segment Data (in thousands)

	Three Months Ended
Revenue	September 30, 2024							September 30, 2023
	Third-Party Revenues		Intersegment Revenues (Expenses), net			Direct Revenues		Third-Party Revenues		Intersegment Revenues (Expenses), net			Direct Revenues
Environmental Services	$	1,287,650	$	9,537		$	1,297,187	$	1,135,279	$	11,084		$	1,146,363
Safety-Kleen Sustainability Solutions		241,676		(9,537	)		232,139		230,305		(11,084	)		219,221
Corporate Items		96		—			96		112		—			112
Total	$	1,529,422	$	—		$	1,529,422	$	1,365,696	$	—		$	1,365,696

	Nine Months Ended
Revenue	September 30, 2024							September 30, 2023
	Third-Party Revenues		Intersegment Revenues (Expenses), net			Direct Revenues		Third-Party Revenues		Intersegment Revenues (Expenses), net			Direct Revenues
Environmental Services	$	3,746,227	$	32,853		$	3,779,080	$	3,357,743	$	31,397		$	3,389,140
Safety-Kleen Sustainability Solutions		712,312		(32,853	)		679,459		712,905		(31,397	)		681,508
Corporate Items		297		—			297		335		—			335
Total	$	4,458,836	$	—		$	4,458,836	$	4,070,983	$	—		$	4,070,983

	Three Months Ended						Nine Months Ended
Adjusted EBITDA	September 30, 2024			September 30, 2023			September 30, 2024			September 30, 2023
Environmental Services	$	332,502		$	288,982		$	956,892		$	822,949
Safety-Kleen Sustainability Solutions		41,226			31,146			122,402			126,024
Corporate Items		(71,914	)		(65,111	)		(219,569	)		(191,312	)
Total	$	301,814		$	255,017		$	859,725		$	757,661

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Clean Harbors Announces Third-Quarter 2024 Financial Results