Clean Harbors, Inc. (NYSE:CLH) Q3 2019 Earnings Conference Call - Final Transcript

Oct 30, 2019 • 09:00 am ET

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Clean Harbors, Inc. (NYSE:CLH) Q3 2019 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Greetings, and welcome to the Clean Harbors, Inc. Third Quarter 2019 Conference Call. [Operator Instructions] A question-and-answer session will follow the formal presentation. [Operator Instructions]

It's now my pleasure to introduce your host, Michael McDonald, General Counsel for Clean Harbors, Inc. Please go ahead, sir.

Executive
Michael R. McDonald

Thank you, Kevin, 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, October 30, 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 the appendix of today's presentation.

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

Executive
Alan S. McKim

Thanks, Michael. Good morning, everyone. Thank you for joining us today. Starting on Slide 3. Q3 was another strong quarter for us as we drove high-value waste streams into our network and achieved growth across many of our service businesses. It was our eighth consecutive quarter of profitable growth. We delivered nice revenue growth of 6% in the quarter and grew adjusted EBITDA by 11% on the strength of our business mix, pricing and higher efficiencies. Environmental Services was the primary driver behind our strong performance, and Safety-Kleen contributed to our profitable growth.

Turning to our segment results, beginning with Environmental Services on Slide 4. Revenues were up 8% in Q3 due to growth in our volumes, particularly incineration, the mix of waste that we received and the strong growth across multiple service businesses such as Field Services. Adjusted EBITDA increased 19%, which translated to a margin improvement of 180 basis points and put the segment above 20% for the second consecutive quarter. That level of margin and profitability reflects the mix and volumes we saw in the quarter, supported by ongoing efficiencies at our facilities. As I mentioned last quarter, we also continue to realize the benefits of the regional structure that we instituted in 2018.

Incineration utilization came in at 92%, up considerably from a year ago. The plants ran well in the quarter, and that helped limit our turnaround days, which we had expected