EX-99.1 2 clh-10k2021pressrelease.htm EX-99.1 Document
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EXHIBIT 99.1
Press Release                                            

Clean Harbors Announces Fourth-Quarter and
Full-Year 2021 Financial Results

•Reports Q4 Revenues of $1.12 Billion; Full-Year Revenues of $3.81 Billion
•Generates Q4 Net Income of $49.0 Million, or EPS of $0.90, with Adjusted EPS of $0.89; Full-Year Net Income of $203.2 Million, or EPS of $3.71, with Adjusted EPS of $3.64
•Achieves Q4 Adjusted EBITDA Growth of 23% to $174.3 Million; Generates Record Full-Year Adjusted EBITDA of $676.6 Million
•Delivers Full-Year Net Cash from Operating Activities of $546.0 Million and Record Adjusted Free Cash Flow of $326.3 Million
•Provides Full-Year 2022 Adjusted EBITDA and Adjusted Free Cash Flow Guidance

NORWELL, Mass. – February 23, 2022 – Clean Harbors, Inc. (“Clean Harbors”) (NYSE: CLH), the leading provider of environmental and industrial services throughout North America, today announced financial results for the fourth quarter and year ended December 31, 2021.

“The fourth quarter marked a strong close to the year for Clean Harbors and demonstrated the ongoing success of our comprehensive growth strategy,” said Alan S. McKim, Chairman, President and Chief Executive Officer. “Favorable market dynamics for both our operating segments drove our performance – including high demand for hazardous waste disposal, industrial services and re-refined products. This positive market environment, combined with strong execution by our entire team, enabled us to exceed our guidance for both Adjusted EBITDA and adjusted free cash flow. With contributions from HydroChemPSC (“HPC”), which we acquired in October, we delivered more than $1 billion in quarterly revenue for the first time in our Company’s history.”

Fourth-Quarter Results
Revenues increased 41% to $1.12 billion from $796.2 million in the same period of 2020. Income from operations grew 33% to $82.2 million from $61.7 million in the fourth quarter of 2020.

Net income was $49.0 million, or $0.90 per diluted share. This compares with net income of $39.3 million, or $0.71 per diluted share, for the same period in 2020. Adjusted for certain items in both periods, adjusted net income was $48.6 million, or $0.89 per diluted share, for the fourth quarter of 2021, compared with adjusted net income of $35.0 million, or $0.63 per diluted share, for the same period of 2020. (See reconciliation tables below). Net income and adjusted net income results for the fourth quarter of 2021 included pre-tax integration and severance costs of $8.6 million. Comparable costs in the fourth quarter of 2020 were $1.9 million.

Adjusted EBITDA (see description below) increased 23% to $174.3 million from $141.8 million in the same period of 2020. Benefits from Canadian government assistance programs accounted for $0.3 million of
Clean Harbors • 42 Longwater Drive • PO Box 9149 • Norwell, Massachusetts 02061-9149 • 800.282.0058 • www.cleanharbors.com
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contributions in the fourth quarter of 2021, compared with $5.6 million in benefits from both Canadian and U.S. government programs in the same period of 2020.

Q4 2021 Review
“Revenues in our Environmental Services segment increased 36%, reflecting the HPC acquisition, robust demand for our disposal and recycling services, and healthy growth in our Industrial Services and Field Services businesses,” McKim said. “Our incineration network utilization was 92% in the quarter, compared with 84% in the prior year, reflecting some project opportunities, as well as a focused effort to drive additional volumes and make progress on our considerable backlog. We saw a pickup in small remediation projects that drove our landfill volumes up 15%. Safety-Kleen Environmental continued its steady rebound, growing 6% through wins across its core service offerings. For the third consecutive quarter, our legacy Industrial Services business, which excludes HPC, grew substantially, rising 26% due to market demand as customers work to address deferred maintenance that resulted from the pandemic.

“Revenues in our Safety-Kleen Sustainability Solutions (SKSS) segment grew more than 60% from a year ago and Adjusted EBITDA nearly tripled,” McKim said. “As we saw throughout 2021, demand for both our base oil and blended products in the quarter drove strong pricing. We complemented that product pricing with highly effective management of our collection costs throughout our network. Waste oil gallons collected were up 14% in the quarter to 56 million gallons.”

2021 Financial Results
Clean Harbors’ revenues were $3.81 billion compared with $3.14 billion in 2020. Income from operations increased 38% to $347.9 million from $251.3 million in 2020.

Net income was $203.2 million, or $3.71 per diluted share, compared with net income of $134.8 million, or $2.42 per diluted share for 2020. Adjusted for certain items in both periods, the Company reported adjusted net income for 2021 of $199.6 million, or $3.64 per diluted share, compared with adjusted net income of $129.4 million, or $2.32 per diluted share, for 2020. (See reconciliation table below). Net income and adjusted net income results for 2021 included pre-tax integration and severance costs of $19.7 million, with the HPC acquisition representing the largest factor. Comparable costs in 2020 were $12.5 million driven by pandemic-related workforce reductions.

Adjusted EBITDA (see description below) increased 18% to $676.6 million, which included $12.0 million of benefits from government assistance programs, compared with Adjusted EBITDA of $573.8 million in 2020, which included $42.3 million of benefits from government assistance programs. The Company also generated record adjusted free cash flow of $326.3 million in 2021, a 23% increase from the prior year.

“Our results reflect the continuation of a multi-year growth trend in our revenues, Adjusted EBITDA and adjusted free cash flow generation,” McKim said. “Beyond our financial accomplishments, 2021 was a year of significant achievement for the Company, including the HPC acquisition, commencing the expansion of our incineration network in Nebraska and overcoming the deep freeze in the Southern U.S. that temporarily shut
Clean Harbors • 42 Longwater Drive • PO Box 9149 • Norwell, Massachusetts 02061-9149 • 800.282.0058 • www.cleanharbors.com
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down six of our incinerators in early 2021. In addition, we addressed inflationary conditions not seen in decades with rigorous pricing initiatives and navigated the various phases of the pandemic, while generating $59 million of COVID decontamination revenue. Overall, it was another year of delivering exceptional performance for our stakeholders as we improved our ROIC for the fourth consecutive year.”

Business Outlook and Financial Guidance
“We see momentum continuing across all our key business lines, which will support our plans for profitable growth in 2022,” McKim said. “The new year began with a healthy backlog of waste streams in our disposal facilities and at customer sites, with underlying trends in regulations and U.S. manufacturing further supporting our positive view. We are seeing a robust pipeline of remediation and waste projects heading into the year; that is only likely to increase as the market contemplates its strategy to address PFAS and the government moves forward with its infrastructure spending plan.

“The outlook for our Industrial Services business is also promising, and we are excited about the prospects for HPC, which has given us a leadership position in the space,” McKim said. “HPC has a talented team with great assets including industry-leading automation technology. In the short time we’ve owned the company, the cultural fit has been excellent, and we see enormous potential to generate cross-selling and capture synergies.

“Within SKSS, we continue to see a favorable pricing environment for our sustainable lubricant products and base oil. Coupled with the effective systems we have in place to manage our waste oil collection costs and improve transportation efficiencies, we expect to maintain a healthy re-refining spread in that segment again in 2022,” McKim concluded. “Overall, we are confident that we have pricing and cost reduction strategies in place to offset inflation in full year 2022. Given the positive demand environment across North America, we expect Clean Harbors to deliver strong profitable growth and solid free cash flow this year.”

For the first quarter, Clean Harbors expects Adjusted EBITDA to increase 30%-35% from the prior year, largely due to the addition of HPC and higher profitability in the SKSS segment.

For full-year 2022, Clean Harbors expects:
•Adjusted EBITDA in the range of $765 million to $795 million. This range is based on anticipated GAAP net income in the range of $204 million to $237 million; and
•Adjusted free cash flow in the range of $250 million to $290 million, based on anticipated net cash from operating activities in the range of $560 million to $620 million.

Non-GAAP Results
Clean Harbors reports Adjusted EBITDA, which is a non-GAAP financial measure and should not be considered an alternative to net income or other measurements under generally accepted accounting principles (GAAP), but viewed only as a supplement to those measurements. Adjusted EBITDA is not calculated identically by all companies, and therefore the Company’s measurement of Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies. Clean Harbors believes that Adjusted
Clean Harbors • 42 Longwater Drive • PO Box 9149 • Norwell, Massachusetts 02061-9149 • 800.282.0058 • www.cleanharbors.com
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EBITDA provides additional useful information to investors since the Company’s loan covenants are based upon levels of Adjusted EBITDA achieved and management routinely evaluates the performance of its businesses based upon levels of Adjusted EBITDA. The Company defines Adjusted EBITDA in accordance with its existing revolving credit agreement, as described in the following reconciliation showing the differences between reported net income and Adjusted EBITDA for the three and twelve months ended December 31, 2021 and 2020 (in thousands, except percentages):
For the Three Months EndedFor the Twelve Months Ended
December 31, 2021December 31, 2020December 31, 2021December 31, 2020
Net income$48,993 $39,332 $203,247 $134,837 
Accretion of environmental liabilities3,120 2,902 11,745 11,051 
Stock-based compensation6,053 5,763 18,839 18,502 
Depreciation and amortization82,929 71,418 298,135 292,915 
Other (income) expense, net(1,994)(307)515 290 
Loss on sale of businesses— — — 3,376 
Interest expense, net of interest income23,704 18,272 77,657 73,120 
Provision for income taxes11,495 4,444 66,468 39,713 
Adjusted EBITDA$174,300 $141,824 $676,606 $573,804 
Adjusted EBITDA Margin15.6 %17.8 %17.8 %18.3 %
This press release includes a discussion of net income and earnings per share adjusted for the loss on sale of businesses and the impacts of tax-related valuation allowances and other items as identified in the reconciliations provided below. The Company believes that discussion of these additional non-GAAP measures provides investors with meaningful comparisons of current results to prior periods’ results by excluding items that the Company does not believe reflect its fundamental business performance. The following shows the difference between net income and adjusted net income, and the difference between earnings per share and adjusted earnings per share, for the three and twelve months ended December 31, 2021 and 2020 (in thousands, except per share amounts):
For the Three Months EndedFor the Twelve Months Ended
December 31, 2021December 31, 2020December 31, 2021December 31, 2020
Adjusted net income
Net income$48,993 $39,332 $203,247 $134,837 
Loss on sale of businesses— — — 3,376 
Tax-related valuation allowances and other*(428)(4,303)(3,649)(8,805)
Adjusted net income$48,565 $35,029 $199,598 $129,408 
Adjusted earnings per share
Earnings per share$0.90 $0.71 $3.71 $2.42 
Loss on sale of businesses— — — 0.06 
Tax-related valuation allowances and other*(0.01)(0.08)(0.07)(0.16)
Adjusted earnings per share
$0.89 $0.63 $3.64 $2.32 
* For the twelve months ended December 31, 2020, other amounts include a $1.6 million benefit, or $0.03 per share, related to tax benefits from impacts of amendments to prior period tax filings.

Clean Harbors • 42 Longwater Drive • PO Box 9149 • Norwell, Massachusetts 02061-9149 • 800.282.0058 • www.cleanharbors.com
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Adjusted Free Cash Flow Reconciliation
Clean Harbors reports adjusted free cash flow, which it considers to be a measurement of liquidity that provides useful information to investors about its ability to generate cash. The Company defines adjusted free cash flow as net cash from operating activities excluding cash impacts of items derived from non-operating activities, less additions to property, plant and equipment plus proceeds from sale and disposal of fixed assets. The Company excludes cash impacts of items derived from non-operating activities such as taxes paid in connection with divestitures and in 2020 also excluded cash paid in connection with the purchase of its corporate headquarters and certain capital improvements to the site as these expenditures are considered one-time in nature. Adjusted free cash flow should not be considered an alternative to net cash from operating activities or other measurements under GAAP. Adjusted free cash flow is not calculated identically by all companies, and therefore the Company’s measurement of adjusted free cash flow may not be comparable to similarly titled measures reported by other companies.

An itemized reconciliation between net cash from operating activities and adjusted free cash flow is as follows for the three and twelve months ended December 31, 2021 and 2020 (in thousands):
For the Three Months EndedFor the Twelve Months Ended
December 31, 2021December 31, 2020December 31, 2021December 31, 2020
Adjusted free cash flow
Net cash from operating activities$177,771 $113,165 $545,997 $430,597 
Additions to property, plant and equipment(95,202)(45,899)(241,856)(196,256)
Purchase and capital improvements of corporate HQ— — — 21,080 
Proceeds from sale and disposal of fixed assets5,732 2,316 22,156 9,623 
Adjusted free cash flow$88,301 $69,582 $326,297 $265,044 
Adjusted EBITDA Guidance Reconciliation
An itemized reconciliation between projected GAAP net income and projected Adjusted EBITDA is as follows (in millions):
For the Year Ending
December 31, 2022
Projected GAAP net income$204to$237
Adjustments:
Accretion of environmental liabilities13to12
Stock-based compensation26to29
Depreciation and amortization340to330
Interest expense, net104to100
Provision for income taxes78to87
Projected Adjusted EBITDA$765to$795
Clean Harbors • 42 Longwater Drive • PO Box 9149 • Norwell, Massachusetts 02061-9149 • 800.282.0058 • www.cleanharbors.com
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Adjusted Free Cash Flow Guidance Reconciliation
An itemized reconciliation between projected net cash from operating activities and projected adjusted free cash flow is as follows (in millions):
For the Year Ending
December 31, 2022
Projected net cash from operating activities$560to$620
Additions to property, plant and equipment(320)to(340)
Proceeds from sale and disposal of fixed assets10to10
Projected adjusted free cash flow$250to$290

Conference Call Information
Clean Harbors will conduct a conference call for investors today at 9:00 a.m. (ET) to discuss the information contained in this press release. During the call, management will discuss Clean Harbors’ financial results, business outlook and growth strategy. Investors who wish to listen to the webcast and view the accompanying slides should visit the Investor Relations section of the Company’s website at www.cleanharbors.com. The live call also can be accessed by dialing 201.689.8881 or 877.709.8155 prior to the start time. If you are unable to listen to the live conference call, the webcast will be archived on the Company’s website.
About Clean Harbors
Clean Harbors (NYSE: CLH) is North America’s leading provider of environmental and industrial services. The Company serves a diverse customer base, including a majority of Fortune 500 companies. Its customer base spans a number of industries, including chemical, energy and manufacturing, as well as numerous government agencies. These customers rely on Clean Harbors to deliver a broad range of services such as end-to-end hazardous waste management, emergency spill response, industrial cleaning and maintenance, and recycling services. Through its Safety-Kleen subsidiary, Clean Harbors also is North America’s largest re-refiner and recycler of used oil and a leading provider of parts washers and environmental services to commercial, industrial and automotive customers. Founded in 1980 and based in Massachusetts, Clean Harbors operates in the United States, Canada, Mexico, Puerto Rico and India. For more information, visit www.cleanharbors.com.
Clean Harbors • 42 Longwater Drive • PO Box 9149 • Norwell, Massachusetts 02061-9149 • 800.282.0058 • www.cleanharbors.com
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Safe Harbor Statement
Any statements contained herein that are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are generally identifiable by use of the words “believes,” “expects,” “intends,” “anticipates,” “plans to,” “seeks,” “should,” “estimates,” “projects,” “may,” “likely,” or similar expressions. Such statements may include, but are not limited to, statements about future financial and operating results, and other statements that are not historical facts. Such statements are based upon the beliefs and expectations of Clean Harbors’ management as of this date only and are subject to certain risks and uncertainties that could cause actual results to differ materially, including, without limitation, those items identified as “Risk Factors” in Clean Harbors’ most recently filed Form 10-K and Form 10-Q. Forward-looking statements are neither historical facts nor assurances of future performance. Therefore, readers are cautioned not to place undue reliance on these forward-looking statements. Clean Harbors undertakes no obligation to revise or publicly release the results of any revision to these forward-looking statements other than through its filings with the Securities and Exchange Commission, which may be viewed in the “Investors” section of Clean Harbors’ website at www.cleanharbors.com.
Contacts:
Michael L. Battles
Jim Buckley
EVP and Chief Financial Officer
SVP Investor Relations
Clean Harbors, Inc.
Clean Harbors, Inc.
781.792.5100
781.792.5100
InvestorRelations@cleanharbors.com
Buckley.James@cleanharbors.com
    
    
    
    
    
Clean Harbors • 42 Longwater Drive • PO Box 9149 • Norwell, Massachusetts 02061-9149 • 800.282.0058 • www.cleanharbors.com
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CLEAN HARBORS, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)

 For the Three Months EndedFor the Twelve Months Ended
December 31, 2021December 31, 2020December 31, 2021December 31, 2020
Revenues$1,119,481 $796,190 $3,805,566 $3,144,097 
Cost of revenues: (exclusive of items shown separately below)792,183 548,775 2,609,837 2,137,751 
Selling, general and administrative expenses159,051 111,354 537,962 451,044 
Accretion of environmental liabilities3,120 2,902 11,745 11,051 
Depreciation and amortization82,929 71,418 298,135 292,915 
Income from operations82,198 61,741 347,887 251,336 
Other income (expense), net1,994 307 (515)(290)
Loss on sale of businesses— — — (3,376)
Interest expense, net(23,704)(18,272)(77,657)(73,120)
Income before provision for income taxes60,488 43,776 269,715 174,550 
Provision for income taxes11,495 4,444 66,468 39,713 
Net income$48,993 $39,332 $203,247 $134,837 
Earnings per share:  
Basic$0.90 $0.72 $3.73 $2.43 
Diluted$0.90 $0.71 $3.71 $2.42 
Shares used to compute earnings per share - Basic54,39854,98254,51455,479
Shares used to compute earnings per share - Diluted54,65855,26454,76155,690


Clean Harbors • 42 Longwater Drive • PO Box 9149 • Norwell, Massachusetts 02061-9149 • 800.282.0058 • www.cleanharbors.com
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CLEAN HARBORS, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
December 31, 2021December 31, 2020
Current assets:  
Cash and cash equivalents$452,575 $519,101 
Short-term marketable securities81,724 51,857 
Accounts receivable, net792,734 611,534 
Unbilled accounts receivable94,963 55,681 
Inventories and supplies250,692 220,498 
Prepaid expenses and other current assets68,483 67,051 
Total current assets1,741,171 1,525,722 
Property, plant and equipment, net1,863,175 1,525,298 
Other assets:
Operating lease right-of-use assets161,797 150,341 
Goodwill1,227,042 527,023 
Permits and other intangibles, net644,912 386,620 
Other15,602 16,516 
Total other assets2,049,353 1,080,500 
Total assets$5,653,699 $4,131,520 
Current liabilities:
Current portion of long-term debt$17,535 $7,535 
Accounts payable359,866 195,878 
Deferred revenue83,749 74,066 
Accrued expenses and other current liabilities391,414 295,823 
Current portion of closure, post-closure and remedial liabilities25,136 26,093 
Current portion of operating lease liabilities47,614 36,750 
Total current liabilities925,314 636,145 
Other liabilities: 
Closure and post-closure liabilities, less current portion87,088 74,023 
Remedial liabilities, less current portion98,752 102,623 
Long-term debt, less current portion2,517,024 1,549,641 
Operating lease liabilities, less current portion117,991 114,258 
Deferred tax liabilities314,853 230,097 
Other long-term liabilities78,790 83,182 
Total other liabilities3,214,498 2,153,824 
       Total stockholders’ equity, net
1,513,887 1,341,551 
       Total liabilities and stockholders’ equity
$5,653,699 $4,131,520 
Clean Harbors • 42 Longwater Drive • PO Box 9149 • Norwell, Massachusetts 02061-9149 • 800.282.0058 • www.cleanharbors.com
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CLEAN HARBORS, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
For the Year Ended
December 31, 2021December 31, 2020
Cash flows from operating activities:
Net income$203,247 $134,837 
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization298,135 292,915 
Allowance for doubtful accounts8,018 10,133 
Amortization of deferred financing costs and debt discount4,245 3,666 
Accretion of environmental liabilities11,745 11,051 
Changes in environmental liability estimates2,979 10,698 
Deferred income taxes1,482 (9,748)
Other expense, net515 290 
Stock-based compensation18,839 18,502 
Loss on sale of businesses— 3,376 
Environmental expenditures(15,506)(12,401)
Changes in assets and liabilities, net of acquisitions:
Accounts receivable and unbilled accounts receivable(96,551)22,422 
Inventories and supplies(31,689)(7,933)
Other current and non-current assets9,268 (12,602)
Accounts payable108,398 (80,328)
Other current and long-term liabilities22,872 45,719 
Net cash from operating activities545,997 430,597 
Cash flows used in investing activities:
Additions to property, plant and equipment(241,856)(196,256)
Proceeds from sale and disposal of fixed assets22,156 9,623 
Acquisitions, net of cash acquired(1,253,232)(8,839)
Additions to intangible assets including costs to obtain or renew permits(3,848)(2,029)
Purchases of available-for-sale securities(129,234)(70,891)
Proceeds from sale of available-for-sale securities98,412 61,220 
Proceeds from sale of businesses, net of transactional costs— 7,712 
Net cash used in investing activities(1,507,602)(199,460)
Cash flows used in financing activities:
Change in uncashed checks(1,806)5,404 
Tax payments related to withholdings on vested restricted stock(10,805)(5,331)
Repurchases of common stock(54,410)(74,844)
Deferred financing costs paid(13,737)(2,171)
Payments on finance leases(8,458)(4,469)
Principal payments on debt(7,535)(7,535)
Proceeds from issuance of debt, net of discount995,000 — 
Borrowings from revolving credit facility— 150,000 
Payment on revolving credit facility— (150,000)
Net cash from (used in) financing activities898,249 (88,946)
Effect of exchange rate change on cash(3,170)4,919 
(Decrease) increase in cash and cash equivalents(66,526)147,110 
Cash and cash equivalents, beginning of period519,101 371,991 
Cash and cash equivalents, end of period$452,575 $519,101 

Clean Harbors • 42 Longwater Drive • PO Box 9149 • Norwell, Massachusetts 02061-9149 • 800.282.0058 • www.cleanharbors.com
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Supplemental information:
Cash payments for interest and income taxes:
Interest paid$73,440 $72,535 
Income taxes paid, net of refunds65,192 53,123 
Non-cash investing activities:
Property, plant and equipment accrued19,264 3,536 

Supplemental Segment Data (in thousands)

For the Three Months Ended
RevenueDecember 31, 2021December 31, 2020
Third Party RevenuesIntersegment Revenues (Expense), netDirect RevenuesThird Party RevenuesIntersegment Revenues (Expense), netDirect Revenues
Environmental Services$906,051 $2,071 $908,122 $668,196 $(641)$667,555 
Safety-Kleen Sustainability Solutions213,348 (2,071)211,277 127,922 641 128,563 
Corporate Items82 — 82 72 — 72 
Total$1,119,481 $— $1,119,481 $796,190 $— $796,190 

For the Twelve Months Ended
RevenueDecember 31, 2021December 31, 2020
Third Party RevenuesIntersegment Revenues (Expense), netDirect RevenuesThird Party RevenuesIntersegment Revenues (Expense), netDirect Revenues
Environmental Services$3,025,907 $6,547 $3,032,454 $2,637,641 $(1,740)$2,635,901 
Safety-Kleen Sustainability Solutions779,360 (6,547)772,813 506,166 1,740 507,906 
Corporate Items299 — 299 290 — 290 
Total$3,805,566 $— $3,805,566 $3,144,097 $— $3,144,097 


For the Three Months EndedFor the Twelve Months Ended
Adjusted EBITDADecember 31, 2021December 31, 2020December 31, 2021December 31, 2020
Environmental Services$176,952 $163,817 $659,718 $665,918 
Safety-Kleen Sustainability Solutions61,598 20,966 227,354 83,214 
Corporate Items(64,250)(42,959)(210,466)(175,328)
Total$174,300 $141,824 $676,606 $573,804 

Clean Harbors • 42 Longwater Drive • PO Box 9149 • Norwell, Massachusetts 02061-9149 • 800.282.0058 • www.cleanharbors.com