Clean Harbors, Inc. (NYSE:CLH) Q2 2019 Earnings Conference Call - Final Transcript

Jul 31, 2019 • 09:00 am ET


Clean Harbors, Inc. (NYSE:CLH) Q2 2019 Earnings Conference Call - Final Transcript


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Greetings, and welcome to Clean Harbors, Inc's Second Quarter 2019 Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Michael McDonald, General Counsel for Clean Harbors, Inc. Thank you. Mr. McDonald, you may begin.

Michael McDonald

Thank you, Sherry, and good morning, everyone. With me on today's call are Chairman, President and Chief Executive Officer, Alan S. McKim; EVP and Chief Financial Officer, Mike Battles; and SVP of Investor Relations, Jim Buckley. Slides for today's call are posted on our website, and we invite you to follow along.

Matters we are discussing today that are not historical facts are considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Participants are cautioned not to place undue reliance on these statements, which reflect management's opinions only as of today, July 31, 2019. Information on potential factors and risks that could affect our actual results of operations is included in our SEC filings. The company undertakes no obligation to revise or publicly release the results of any revision to the statements made in today's call other than through filings made concerning this reporting period.

In addition, today's discussion will include references to non-GAAP measures. Clean Harbors believes that such information provides an additional measurement and consistent historical comparison of its performance. Reconciliations of non-GAAP measures to the most directly comparable GAAP measures are available in today's news release, on our website and in the appendix of today's presentation.

And now I'd like to turn the call over to our CEO, Alan McKim. Alan?

Alan S. McKim

Okay. Thanks, Michael. Good morning, everyone. Thank you for joining us.

Starting on Slide 3. We delivered another strong performance in Q2. We extended our momentum by achieving our seventh consecutive quarter of profitable growth. Revenue this quarter, we're up about 2%, and we achieved adjusted EBITDA growth of 7% on the strength of our business mix, our cost-savings initiatives and pricing. We saw nice contributions from both Environmental Services and Safety-Kleen. These more than offset the increase in our corporate segment resulting from investments in our workforce.

Turning to our segment results, beginning with Environmental Services on Slide 4. Revenues were up modestly this quarter largely because in Q2 '18, we benefited from an unusually strong turnaround season in several large projects. Certain areas of the Environmental Services segment, particularly our facilities group, enjoyed robust growth in Q2 this year, which more than offset the lower industrial turnaround activities. Adjusted EBITDA increased 8%, which translated to a margin improvement of 120 basis points and put us above 20% for the segment. This business achieved greater profitability, primarily through better mix and increased efficiencies. In addition, we're continuing to realize the benefits of the regional organizational structure that we instituted in 2018 as well as enjoying greater results out of our El Dorado incinerator, which is