US Ecology, Inc. (NASDAQ:ECOL) Q4 2017 Earnings Conference Call Transcript

Feb 16, 2018 • 10:00 am ET

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US Ecology, Inc. (NASDAQ:ECOL) Q4 2017 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good morning, ladies and gentlemen, and welcome to the Fourth Quarter US Ecology Inc Earnings Conference Call. All participants will be in listen-only mode. (Operator Instructions) After today's presentation, there will be an opportunity to ask question. (Operator Instructions) Please note, this event is being recorded.

At this time, I would like to turn the conference over to Eric Gerratt, CFO. Please go ahead, sir.

Executive
Eric Gerratt

Good morning, and thank you for joining us today. Joining me on the call this morning are Chairman and CEO, Jeff Feeler; EVP of Sales and Marketing, Steve Welling; and EVP and COO, Simon Bell.

(Forward-Looking Cautionary Statements)

For those joining by webcast, you can follow along with today's presentation. For those listening by phone, you can access today's presentation on our website at www.usecology.com.

Throughout yesterday's earnings release in our call and presentation today, we refer to adjusted EBITDA, pro forma adjusted EBITDA and adjusted earnings per share. These metrics are not determined in accordance with Generally Accepted Accounting Principles and therefore are susceptible to varying calculation.

A definition, calculation and reconciliation to the financial statements of adjusted earnings per share, adjusted EBITDA and pro forma adjusted EBITDA can be found in Exhibit A of our earnings release. We believe these non-GAAP metrics are useful in evaluating our reported results and our 2018 guidance.

With that, I'd like to turn the call over to Jeff.

Executive
Jeffrey Feeler

Thank you, Eric, and good morning, everybody. I'll start this morning's call with a few summary comments on our fourth quarter released yesterday, before turning the call back to Eric for additional details on our financial results. I'll then close out the call with our business outlook for 2018 before opening up the call for questions and comments. For those that are joining by the webcast presentation, please direct your attention to slide five.

As announced yesterday, US Ecology reported strong financial results, delivering $133.7 million of revenue and adjusted EBITDA of $35.7 million, both in line with our expectation. Adjusted earnings per share for the fourth quarter was $0.73 per share.

Our Environmental Services segment saw strong year-over-year revenue growth of 14%. Our Base Business was much stronger than anticipated, growing 11% over the previous year. This growth benefited in part from the post Hurricane Harvey recovery in Texas, where we saw customers return to normal operations and resume waste shipments, including some catch-up volume.

Even without Texas, our Base Business showed strong 8% growth, benefiting from high volumes late in the fourth quarter, which is typical of a year-end surge. Our Environmental Services segment Event Business showed strong growth at 36% over a soft fourth quarter last year. Sequentially Event Business was down approximately 7% from the third quarter of 2017, slightly below what we'd anticipated as some of the volumes shifted into future periods.

Our Field and Industrial Services segment generated 14% revenue growth, driven by our total waste management service line and an uptick in our industrial and remediation services business unit. Our small quantity generation