US Ecology, Inc. (NASDAQ:ECOL) Q1 2018 Earnings Conference Call Transcript
May 04, 2018 • 10:00 am ET
Jeffrey R. Feeler
up 57% from the same period last year, on an 11% increase in operating income, lower interest expense and lower taxes.
Environmental Services segment revenue grew 6% during the quarter on strong Event Business growth of 8% and continued Base Business growth of 2%. Base Business growth was in line with our expectations, particularly when compared to the strong first quarter last year and factoring in the stronger-than-expected fourth quarter of 2017.
As discussed in our year-end conference call, we saw a surge in volume in the fourth quarter of 2017, resulting from a typical year-end push, reporting a 2% growth in our first quarter of Base Business, on top of these recent trends, supports the ongoing momentum we're seeing in the business. Event Business was particularly strong in the quarter in the Southwest and Eastern portions of the United States, which offset generally lower seasonal volumes flowing into our Canadian operation.
Our Field and Industrial Services business saw strong revenue growth, up 16% over the same quarter last year, led by increased business in our total waste management and small quantity generation services which helped drive a 20% gain on our Field Services side. This growth was partially offset by lower remediation revenues, which is typical for winter conditions.
Our Industrial Services business continues to be softer than our expectations coming into the year. Further, revenue quality suffered in the quarter as business opportunities were at lower margins. Overall, the first quarter was on track. I'm very pleased with the progress we continue to make. We continued to see strengthening indicators of business activity that should support our growth expectations for the year.
With that, I'll turn it back to Eric.
Thanks, Jeff. As shown on slide 7, revenue for the first quarter of 2018 was $120.1 million, up 9% from $110.2 million in the first quarter of 2017. Revenue for the Environmental Services segment for the first quarter was $86.5 million compared to $81.3 million in the first quarter of last year. This increase was driven by a 5% increase in treatment and disposal revenue and a 12% increase in transportation service revenue. Base Business for the Environmental Services segment was up 2% compared to the first quarter last year and represented 83% of treatment and disposal revenue. Event Business for the Environmental Services segment increased 8% from the first quarter last year and represented 17% of treatment and disposal revenue.
The Field and Industrial Services segment delivered revenue of $33.6 million in the first quarter of 2018, up 16% from $28.9 million in the first quarter of 2017. Slide 8 breaks down our Environmental Services treatment and disposal revenue for both Base and Event Business by industry vertical. Base Business increased primarily in the chemical manufacturing, other and general manufacturing verticals. These increases were partially offset by decreases in the refining, broker/TSDF and metals manufacturing verticals during the quarter. The increase in Event Business was primarily driven by increases in the other and waste management and remediation