US Ecology, Inc. (NASDAQ:ECOL) Q3 2018 Earnings Conference Call Transcript

Nov 02, 2018 • 10:00 am ET

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US Ecology, Inc. (NASDAQ:ECOL) Q3 2018 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good morning, and welcome to the Third Quarter 2018 US Ecology Inc. Earnings Conference Call. (Operator Instructions) Please note, that today's event is being recorded. I would now like to turn the conference over to Eric Gerratt, Chief Financial Officer. 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 Chief Executive Officer, Jeff Feeler; Executive Vice President of Sales and Marketing, Steve Welling; and Executive Vice President and Chief Operating Officer, 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 and 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 are therefore susceptible to varying calculations. 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 third quarter results released yesterday, before turning the call back to Eric for additional details on our financials. I'll then close out the call with an update on our outlook for the remainder of 2018 and an early look into 2019 before opening up the call for questions.

For those following the webcast presentation, please direct your attention to Slide 5. Yesterday, we reported exceptionally strong third quarter results that slightly exceeded our own internal expectations. Revenue was up 13% to $151.4 million and adjusted EBITDA was up 32% to $35.6 million over the same quarter last year. Our adjusted earnings per share was $0.70 per diluted share, up 89% from the same period last year on a 31% increase in operating income and lower taxes.

Our Environmental Services segment saw revenue growth of 10%, led by strength in our Base Business, which increased 9% during the quarter. This strong growth was partially due to the impact Hurricane Harvey had on last year's results. When excluding the estimated impact of Hurricane Harvey on our prior year results, our Base Business still saw strong year-over-year growth of approximately 5%. The strong Base Business more than offset an 8% decline in our Event Business. This decline was attributable to lower shipments from a multi-year cleanup project as a transition between phases. Absent this singular project, our Event Business was down 1% for the quarter.

Our, Field and Industrial Services business showed exceptional growth during the quarter, up 22% from a combination of organic and recently acquired operations. Organic growth was 13%, above the same quarter last