US Ecology, Inc. (NASDAQ:ECOL) Q2 2020 Earnings Conference Call - Final Transcript
Aug 07, 2020 • 10:00 am ET
hope you and your families have remained safe during these uncertain times. Before I have Eric review the second quarter results, I'd like to update everyone on how US Ecology is managing through the last few months, given the impact of COVID-19 to the economy and our customers.
For those that are following on our webcast presentation, please direct your attention to Slide 6. During the second quarter, in response to the COVID-19 pandemic, we took swift action to deploy safety protocols throughout our organization, mobilized 30% of our workforce to work from home. Using our established networks and expanding our procurement channels, we were able to secure valuable PPE to ensure that our teams and customers were properly protected.
With our services deemed essential by the US government, we implemented our business continuity plans and I am pleased to report that we have been able to remain operational during the entire pandemic, thus far with no lost days. This focus on safety, process and protecting our team members was critical in mitigating the spread of the disease, particularly in hot zones where many of our team members are deployed.
To safeguard the financial strength of the company, we implemented proactive and prudent measures to our operating plan, reducing costs and capital spending. Our capital preservation initiatives included a reduction of approximately 30% to our planned 2020 capital expenditures, the suspension of our quarterly cash dividend, cost controls, including deferment of non-critical activities, elimination of discretionary spending, and rightsizing the organization where needed. These actions are anticipated to generate up to $70 million of annual cash savings, providing the flexibility to preserve our talented workforce and position us to take advantage of the opportunities as the market rebounds.
These actions also supplement our strong operational cash flow generation providing added financial flexibility as we navigate these unprecedented times. In fact, our free cash flow during the quarter almost tripled to prior year levels, allowing us to strengthen our balance sheet and improve our net debt position since the first quarter.
During the second quarter, we amended our credit agreement to temporarily increase our leverage covenant through March 31, 2022 allowing for further financial flexibility. I continue to be thoroughly impressed with the dedication, execution and adaptability of our 3,500 team members who have continued to service our customers despite these unparalleled and stressful conditions. They continue to provide safe and compliant solutions to protect human health and the environment, which is exactly what is needed today. This includes our COVID-19 Safe Operations Program, a new proactive cleaning and decontamination solutions package for commercial and government customers. This multifaceted program supports a full range of business needs to safely reopen and resume operations, including one-time or ongoing decontamination, preventative cleaning and waste disposal services, all from one trusted partner.
Through the end of July, we completed 1,700 COVID-19 responses, which accelerated in late June and July as infection rates increased on reopening. Looking at the quarter, we saw revenue declines across