- Economic picture: The year is “off to a promising start,” said Eric Dugas, executive vice president and CFO. That’s mainly due to strong organic revenue growth of 13% in the Environmental Services segment (which includes the company’s recycling and waste disposal services) due to a combination of volume and pricing, he said. Disposal demand “remains very strong, which has created a robust backlog of waste across the industry.” Clean Harbors hopes strong ES performance will balance out its Safety Kleen oil collection and recycling sector, which is struggling from base oil and blended price dips.
- Acquisition updates: Clean Harbors acquired Thompson Industrial Services on the last day of the quarter in an all-cash deal for about $110 million, which co-CEO Mike Battles says will help expand the company’s presence in the Southeast and strengthen its position “where we have sold environmental services, but not industrial services.”
- Incinerator utilization: Repairs and “unplanned weather-related outages” contributed to lower-than-expected incinerator utilization of 80% in Q1 compared to 85% the same time a year ago. Co-CEO Eric Gerstenberg estimates utilization will return to the “mid-80s” soon, and “as of today, all our incinerators are running well.” Average pricing for these facilities was up 15% from Q1 of 2022 due to what he described as a focus on “high-value streams.”
- Kimball incinerator update: Clean Harbors is still on track to open its 70,000-ton-per-year hazardous waste incinerator in Kimball, Nebraska in 2025, “and given the market conditions, we certainly wish it was sooner,” Battles said. Clean Harbors plans to spend about $90 million in 2023 to continue the project.
- Landfills: Landfill tonnage was down 8% year over year due to flooding at its hazardous waste landfill in Buttonwillow, California. However, landfill pricing per ton was up 17% in Q1, and the company continues to work on “a healthy mix of waste projects,” Gerstenberg said.
- Safety: Gerstenberg praised workers for strong safety practices in the first quarter. Clean Harbors had a Total Recordable Incident Rate of 0.61, which was lower than its goal of 0.7. “The first quarter can always be a challenge from a safety perspective, given the frequency of icy surfaces, which increase the potential for slips, trips and falls. So hats off to the team on keeping yourself and your colleagues safe,” he said.
- Guidance update: Clean Harbors updated its full-year guidance not only to reflect Safety Kleen sector challenges, but also the Thompson acquisition, which could bring in about $80 million of revenue and $9 million of adjusted earnings before interest, taxes, depreciation and amortization by the end of the year. Adjusted free cash flow guidance is between $305 million to $345 million for the year, which includes the $90 million for the Kimball incinerator.
Clean Harbors says disposal demand and $110M Thompson Industries deal position it well for 2023
The company touted strong performance in its Environmental Services segment, high disposal demand and improving incinerator utilization.
- Q1 earnings results for major waste and recycling companies By Waste Dive Staff • Updated May 23, 2023
- Clean Harbors identifies incinerator, PFAS and new service sector opportunities for 2023 By Megan Quinn • March 2, 2023